Digital yuan: Chinese currency pilot project could include visitors to Beijing 2022 Olympics

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Li Bo, vice governor of the People’s Bank of China, said on Sunday that the digital currency pilot project is proceeding well after the launch last year in four cities, as well as at the venues of the Winter Olympics. The experiment has since been extended to 10 cities or provinces covering 100 million people.

Speaking at the Boao China Forum for Asia, Li told the central bank focused on how the digital yuan, or renminbi, could be used in the national economy, rather than as a means of reducing the country’s dependence on the US dollar.

“For the internationalization of the renminbi, we have said many times that it is a natural process and that our goal is not to replace the US dollar or any other international currency,” Li told conference attendees. business, held in China’s Hainan Province. “Our goal is to allow the market to choose. “

Deployment is a big deal for China, which could become the first major economy to create an official digital version of its currency. The European Central Bank is also exploring a digital euro.

Officials have touted the digital yuan as a futuristic currency that will make shopping for items more convenient and secure, and help those without access to bank accounts. But a digital yuan would also give Beijing an unprecedented amount of information about where people are and what they are spending their money on, raising concerns about government surveillance.
Li said on Sunday that there was still no timetable for a nationwide rollout of the digital currency, although he added that the central bank was planning to expand the pilot project to other Chinese cities.

And he launched the idea that the digital yuan could be tested with athletes and foreign visitors at next year’s Winter Olympics, which will be held in Beijing.

Some experts in China have suggested that the digital yuan could increase the country’s influence globally. Central bank magazine “China Finance”, for example, published an article last September saying that digital currency has become a “new battleground for sovereign countries.” The article, written by Fudan University professor Sun Lijian and others, called on China to use the digital yuan to break the US dollar monopoly.

Li rejected this idea.

“Our goal is that we want to establish a very strong national network [digital yuan] first and build a healthy ecosystem, ”Li added. But he also said that China will work with international partners to find ways to make digital yuan payments work across borders in the long run. .

The central banker has also taken a cautious tone on cryptocurrencies like bitcoin, which China has taken a position has been going on for years. In 2017, China banned initial coin offerings, a way for businesses or individuals to raise funds by issuing cryptocurrencies. That year, authorities also shut down local cryptocurrency exchanges.

“These are investment alternatives. They are not currencies in themselves ”, Li said of bitcoin and other cryptos, including so-called stablecoins, which are backed by government currencies. He added that it was necessary to prevent such assets to create “serious risks to financial stability”.

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