China’s Digital Currency


Director Changchun Mu explained carefully the criteria for a CBDC in China. The digital currency is called the DCEP, e-CNY or the Digital RMB. Probably the digital yuan is more common.

He stated the criteria –

  1. Protect Monetary Policy and Sovereignty against crypto influence.
  2. Prevent dependence on Alipay and Tenpay (they have 98 percent of the payments market).
  3. Improve efficiency in payments.
  4. Promote financial inclusion (eg in rural areas).

He stated the following will apply – 

  1. Ban crypto
  2. Make digital currency from the central bank legal tender
  3. Adopt a market based approach with partners.
  4. A multi-tiered system, the central bank distributes to the commercial banks; who then distribute to PSPs and telecom providers; who then provide retail services.
  5. Loose links to bank accounts (offline access possible and without a bank account).
  6. Observe local laws for cross-border payments.
  7. Assist the vulnerable in China.

The USA has expresed grave and significant concerns about China using a CBDC for surveillance. That was not talked about by Mu in the panel discourse.

China has had a strong interest in CBDCs and some fear China wants to take on the USA and the USD.

 

By cryptorocks_editor

Editor.