China’s central bank urges faster digital yuan roll-out as other countries begin tests
- People’s Bank of China comments come as other major central banks have made inroads on the development of their own sovereign digital currencies
- China must also ensure that its ongoing pilot tests show the digital yuan is ‘controllable and safeguards the security of payments’
China should accelerate its efforts to launch a sovereign digital currency, elevating it as an important part of an “independent” financial infrastructure in the digital era, a top Chinese central bank official has said.
The comments by Chen Yulu, deputy governor of the People’s Bank of China (PBOC), came months after the country’s top leadership introduced a new inward-facing economic strategy – dual circulation – to support future growth by relying more on domestic demand, and to better insulate itself amid rising geopolitical tensions, particularly with the United States.
The comments also came as other major central banks have made inroads on the development of their own sovereign digital currencies.
“We must serve dual circulation with fintech-led innovations,” Chen said in an article published on Sunday in China Finance magazine, which is run by the PBOC. “We must build an independent and high-quality financial infrastructure … quicken the pace of research and development of the central bank digital currency, and ensure that pilot tests show [the digital currency] is controllable and safeguards the security of payments.”
Last week, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, Sweden’s Riksbank, the Swiss National Bank and the US Federal Reserve jointly issued a report with the Bank for International Settlements discussing potential collaboration on sovereign currencies in their electronic forms to avoid unintended barriers in transferring them internationally.
