Ex-PBoC Chief – Digital Yuan will Support Retail Transactions & Payments
Zhou Xiaochuan, the president of the Chinese Finance Association and ex-governor of People’s Bank of China, has opined that China’s central bank digital currency (CBDC) will support global payments and domestic retail transactions.
While speaking at the 2019 Caixin Hengqin Forum, he explained about the two different kinds of transactions (global settlements and retail dealings) that will be supported by the CBDC.
Zhou, a persuasive financial professional in China, signaled that the country will move forward in its plan to launch digital yuan tailor made to support payment and domestic retail transactions. He also stressed on the risks linked with CBDCs.
While highlighting that fiat money acts as a “symbol of national sovereignty,” Zhou opined that central bank, particularly those with “super sovereign power,” should be extremely cautious while deciding their course. He cautioned that a wrong decision could result in a credit crisis.
Notably, there were news reports that China had finished its work on CBDC project in August. However, the central bank clarified that it is not looking at any specific date for the launch of its digital currency. PBoC pointed out that it needs more time to study and evaluate the project’s pros and cons.
Late last month, an executive at China Center for International Economic Exchanges – regarded as research or policy institute – trusts that the PBoC will be the first major economy to unveil a digital currency in a successful manner.
Even though PBoC continues to move forward with its digital yuan project, it has increased its vigor in crushing cryptocurrency related businesses. While issuing yet another warning last week, PBoC stated that it is taking measures to shut down entities facilitating cryptocurrency trading, including Bitcoin (BTC).
The news had a negative impact on the price of Bitcoin, which hovers around $7,100 levels.