China’s central bank aims to issue digital currency
Move could help Beijing stem capital outflows and challenge global dominance of US dollar
China intended to issue a digital currency as soon as possible, the central bank said yesterday, a move that could help the yuan offset the global dominance of the US dollar and limit capital outflows.
The announcement by the People’s Bank of China came as it wrapped up a symposium on digital currency in Beijing, where it discussed issuance frameworks and related technologies such as encryption.
In a statement summarising the forum and posted on its website, the bank said the currency could reduce the costs involved in circulating banknotes, facilitate economic activities and help combat money-laundering.
A virtual currency would also help the bank improve control of the money supply and payment efficiency, it added
Taking the step would thrust China into largely uncharted waters. Ecuador last year became the first nation to issue state-backed digital money. All of the banks in the tiny South American country have been told to get behind the push.
Hao Hong, chief China strategist at the Bank of Communications, said China’s attitude towards digital currency had been shifting.