Ex PBoC governor says digital yuan will combat US ‘dollarization’. A former senior official has shared that China’s digital currency approach will favor its domestic retail system and prevent the dollarization of the economy.
At the Eurasia Forum conference on Oct. 27, Zhou Xiaochuan, president of the Chinese Finance Association and former governor of the People’s Bank of China (PBoC), told participants that the focus of the central bank on developing a digital currency varied significantly from that of the Group of Seven nations, Canada, France , Germany , Italy, Japan, the United Kingdom , and the United States.
According to Xiaochuan, the G7 was mainly concerned with “the challenges raised by Libra, Bitcoin, and similar digital encrypted currencies,” while China’s central bank was focusing on using its digital currency for retail payments domestically and preventing the U.S. dollar from becoming a more common medium of exchange in the country.
“In China, we’ve [been working] very hard to push the DCEP — that’s the digital currency — and the electronic payment,” said Xiaochuan. ”However, the focus and the major point of our concept and the content are different from the G7 principle.” “We [need] to prevent dollarization. This is one of the major designing points of the Chinese DCEP.”
Countries representing the largest economies in the world have publicly voiced their fears about the introduction of the Libra Facebook project, calling it a challenge to the global financial system. In a draught statement released on Oct. 12, G7 members said that without sufficient regulatory oversight, they would initially oppose any global stablecoin project.
It is confirmed that officials at the central bank of Canada have been planning their own CBDC if Libra were to be blocked by regulators. Tiff Macklem, Governor of the Bank of Canada, said today that central banks need a “globally organised” plan to create a digital currency to deter criminals from misusing it.
China’s central bank recently launched a pilot program to test its digital yuan by giving away $1.5 million to 47,500 people in the city of Shenzhen. Though the CBDC has not been officially released by The People’s Bank of China, it recently drafted a law providing regulatory framework and legitimacy to the digital currency. The law is open for public consultation until Nov. 23.
[image: Ben o’bro]