China should step up its efforts to launch a sovereign digital currency, making it part of an independent financial infrastructure, said Chen Yulu, Deputy Chairman of the People’s Bank of China. This was reported by the South China Morning Post.
Comments of the official are associated with the intensification of CBDC development by a number of large central banks, said the publication.
Chen Yulu also noted that the digital yuan contributes to the implementation of previously announced new economic strategy of China, based on the growth of domestic demand in the country. The new policy is designed to isolate the economy from growing geopolitical tensions with the US and other countries.
„We need to build an independent and quality financial infrastructure […] to accelerate the CBDC’s research and development and ensure that pilot tests show that it is controllable and secure for payments,“ the central bank representative said.
China started digital currency research in 2014. The regulator has accelerated work since the announcement last year by the giant Facebook social network of plans to launch Libra.
The People’s Bank of China is already testing electronic digital currency payments (DCEP) in four cities – Suzhou, Hong Kong, Shenzhen and Chengdu.
The day before, Shenzhen authorities carried out the first distribution of the digital yuan among the population. The lottery was attended by more than 1.9 million metropolitan residents – approximately 15% of the population.
Earlier, the People’s Bank of China specified that DCEP conducted 3.13 million transactions worth 1.1 billion yuan (~$162 million) during the tests.
Chinese authorities expect that the launch of the CBDC will help strengthen the position of the yuan in the international arena and break the domination of the dollar.
Celestial Empire’s success in developing a digital currency has intensified similar research in other major economies. The European Central Bank (ECB), the Bank of England, the US Federal Reserve, the Bank of Canada, the Bank of Japan, as well as the Central Bank of Sweden and Switzerland, together with the Bank for International Settlements, have defined the basic requirements for the CBDC.
The Bank of Korea will begin the last stage of testing digital currency in 2021. The Central Bank of France conducted the first successful test of the CBDC in May.
We would like to remind you that the Bank of Russia accepted the possibility of issuing a digital rouble.