China President Xi Jinping bats for an international regulatory framework for digital currency.
China Should take a Proactive Approach
In an official statement released on October 31 titled ‘Issues on National Medium and Long-Term Social and Economic Strategies,’ Chinese President called for the Asian powerhouse to actively partake in creating a global regulatory framework for digital currency.
“We need to take advantage of the momentum and accelerate the digitalization of various fields including our economy, society and government, as well as proactively participate in creating the international regulatory framework on digital currency and digital tax,” Xi said.
Notably, the strong words by Xi come days after China’s central bank made public the proposed banking law that would see it legalize its national digital currency – the digital yuan – and put an immediate ban any other yuan-pegged tokens in the country.
As reported in October last year that China was mulling launch a central bank digital currency (CBDC), dubbed the Digital Currency Electronic Payment System (DCEP).
Along the same lines, earlier this year, the onset of the COVID-19 pandemic slightly derailed the Chinese government’s ambitious plans to launch a CBDC. However, now that the health crisis has subsided in China, things are again in full motion pertaining to the CBDC project.
China’s Ambitious CBDC Project
In April, reports emerged stating that China’s DCEP will be issued to workers in the city of Suzhou in May. Specifically, it was mentioned that employees would receive a part of their upcoming transportation subsidies in DCEP.
Following this, the Chinese central bank forged several alliances with government and private entities to fast-track its CBDC project.
In August, reports made rounds stating that there were plans to pilot the digital yuan in more cities in China and that a policy design for CBDC would be completed by the end of 2020.
In the same month, it also came to light that the trial of CBDC focused majorly on retail transactions, as against rampant claims stating that the digital yuan was used for large transactions.
Unsurprisingly, the rapid pace of development of the Chinese CBDC has alerted neighboring Asian countries to up their CBDC game too.