China plans on introducing digital yuan

China’s central bank has sent one of its strongest signals yet of a commitment to creating a digital version of the yuan. The bank said in a notice, “The People’s Bank of China (PBoC) will undoubtedly further its research and development of the national digital currency with enhanced top-down design.” 

The notice is a synopsis of the 2020 National Currency Gold Silver and Security Work Video and Telephone Conference, called by Yifei Fan, the Central Bank’s Vice Governor. One of the major goals was to arrange top priorities for the bank in the coming year. 

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This was the third time a digitized yuan, or Digital Currency Electronic Payment (DCEP), was brought up in the annual meeting, the apparent language used shows a solid stance on the project than ever before. 

At the 2018 meeting, the bank claimed it would pursue the project “at a steady pace.” Last year, it commented on “accelerating” the process with a detailed analysis of the trends in cryptocurrency space and strict monitoring over online financing in 2019. 

While the initiative is a few years old, it has been further pushed due to the Coronavirus-related concerns about physical banknotes. In a press conference, the central bank claimed it would disinfect and preserve cash for one to two weeks before taking it in, and place 600 billion yuan of new banknotes in circulation.  

Researchers at the Bank for International Settlements (BIS) recently said the COVID-19 outbreak could promote digital payment adoption and stimulate other countries’ central banks to consider introducing digital currencies across the globe. Along with the drive for DCEP, the PBoC focuses on improving the system to issue and withdraw cash and other issues to better govern cash circulation, as per the notice from the recent meeting,

The bank also has plans on conducting a crackdown on counterfeit money and developing programs to manage large quantities of money.