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Digital yuan won’t replace global Fiat currencies according to former governor at central bank

Digital yuan won’t replace global Fiat currencies according to former governor at central bank

Quick take

1 minute read

  • According to a former government official at the people's bank of China, the Chinese authorities are not looking to replace the current Fiat currencies with its own digital Yuan. 
  • Instead, the central bank project has been purely designed to completely overhaul cross-border trade and investment.

According to a former government official at the people's bank of China, the Chinese authorities are not looking to replace the current Fiat currencies with its own digital Yuan. Instead, the central bank project has been purely designed to completely overhaul cross-border trade and investment.

Not what do you think

The President of the Chinese finance Association and former governor to the People’s bank, Zhou Xiaochuan has recently said that the central-bank digital currency is not going to be replacing global Fiat currencies such as the United States dollar or the euro.

Otherwise known as a DCEP (digital currency electronic payment), the token would be used for investment and trade purposes across borders. Specifically mentioning the Facebook project formerly known as a Libra, the former governor said:

“If you are willing to use it, the yuan can be used for trade and investment… But we are not like Libra and we don’t have an ambition to replace existing currencies.”

He went on to say that the country has learnt from a Libra and its mistakes for international regulation delays. Many regulators were worried that it would have a big impact on financial systems and the sovereigns of money. The governor said that China has taken a much more cautious approach to the project.

“Some countries are worried about the internationalization of yuan… We can’t push them on sensitive issues and we can’t impose our will. We must avoid the perception of great-power chauvinism.”

Interestingly, he went on to say that some of the biggest benefits of a project like the digital yuan is that it will enable both payments and currency conversions in real time.

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