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The digital yuan – developed by the central bank and now under trial in a dozen cities – adopts a two-tier structure, where the central bank issues the digital currency to authorised commercial banks, which then exchanges and circulates it to the public. Photo: Bloomberg
EconomyChina Economy

China digital currency: push to ‘prudently advance’, improve design of e-yuan, central bank governor says

  • Since the roll-out of a pilot programme of the digital yuan in late 2019, digital yuan transactions have reached 62 billion yuan (US$9.7 billion)
  • About 1.6 million merchants across a wide range of businesses accept China’s central bank digital currency
China digital currency
Reuters
Reuters
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China will continue to advance the development of its central bank digital currency and improve its design, People’s Bank of China (PBOC) governor Yi Gang said on Tuesday.

China is a front-runner in the global race to launch a central bank digital currency (CBDC) and is testing a digital yuan, or eCNY, in major cities including Shenzhen, Beijing and Shanghai, but has not set a timetable for its official roll-out.
Going forward, we will continue to prudently advance [research and development] of the eCNY, improve its design and use
Yi Gang

“Going forward, we will continue to prudently advance [research and development] of the eCNY, improve its design and use,” Yi said via video at a Bank of Finland event.

China will improve the privacy protection and anti-counterfeiting features and increase its interoperability with existing payments tools, Yi said.

China will also test the eCNY’s impact on its monetary policy and financial markets, he added.

Yi said the PBOC attaches great importance to the issue of personal information protection, as CBDC issuers have to balance the need between safeguarding privacy and preventing crimes.

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To strike the right balance, the PBOC collects information on a “minimum and necessary” basis in eCNY applications, and strictly controls the storage and usage of personal information.

In September, China issued a blanket ban on all cryptocurrency transactions and mining. Some analysts say the move is aimed at eradicating an activity that threatens China’s own digital currency.

Yi also said the eCNY aims to meet the need of domestic retail payments as cross-border digital payments involve more complicated issues, such as anti-money-laundering.

The PBOC is willing to strengthen cooperation with world central banks in developing CBDC, including setting standards and rules, Yi said.

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