Chinese CBDC must find use in retail and remittance, former PBoC Governor

36084931190 8f04367ce3 h

Former governor of People’s Bank of China Zhou Xiaochuan recently admitted to a local media news outlet that it is imperative for the Chinese CBDC to find use in retail and remittance payments.

Zhou Xiaochuan is one of the most influential economists, bureaucrats, and reformists in the country, but he is best known for his long term service as the governor of the People’s Bank of China (PBoC). After fifteen years of carefully manoeuvring the country through financial ups and downs, he decided to step down last year. However, his ability to speak straight from the shoulder and take a rather bold stance over the most sensitive topics is what makes him admirable.

The first goal for Chinese CBDC – Retail adoption

During his recent interview, he emphasized the broader adoption of digital currency and blockchain. He insisted that one of the ways to ensure his higher acceptance rate is by adopting it in retail and remittance. And while that may be true, he was also quick to ascertain that PBoC’s move to launch Chinese CBDC is not aimed at undercutting the Renminbi’s significance. Fiat currencies are a symbol of a country’s sovereignty and have vital importance in the economy, he asserted. 

Therefore, he added, central banks, especially of the countries that take pride in absolute authority, must be cautious of what direction blockchain and state-backed digital currencies take in their countries. One wrong move could lead to a credit crisis or losing public trust in financial institutions. 

In China, according to him, the Chinese CBDC and blockchain should have two primary focuses. One is the widespread adoption in the domestic retail realm, and the other is the cross border payments involving inter-financial institution settlement. 

Xiaochuan summarized that the retail industry in China stands to benefit immensely from digital currencies and electronic payment systems. Once it is underway, it is only a matter of time that the digital currency electronic payment (DCEP) expands its reach to cross-border settlements for banks and financial institutions, he explains.

Why the rush?

And for those who have wondered why PBoC digital currency adoption as indispensable, one possible reason is the ability it gives to the government to track cash transactions and thereby curtailing money laundering and terrorist financing activities.

In the long term, the central bank digital currency could also streamline financial transactions that potentially reduce China’s exposure to US sanctions and dependence on its financial institutions.

Featured Image by Flickr

Manasee Joshi

Manasee Joshi

An avid reader and an enthusiastic writer, Manasee recently chose to dedicate her time doing freelance writing. A degree in English literature and experiences in Administration, HR, finance, literature, creativity and innovation tucked under her belt, she crafts engaging and compelling content for crypto and blockchain audience.

Related News

Hot Stories

Seth Green loses his 4 NFTs in a Phishing scam; begs not to buy them.
Dogecoin price analysis: DOGE/USD set to break above $0.1 soon?
Do Kwon moves on LUNA`s revival plan despite 90% rejection votes
Recession talks surge, Elon Musk predicts one lasting up to 18 months as crypto tanks
Dogecoin Price Prediction 2022-2030: On its Path to Recovery?

Follow Us

Industry News

South Korean government revives ‘Grim Reapers’ as Terra`s collapse puts it on the regulation edge
TFL's legal team has left the company amid the LUNA crisis
Do Kwon moves on LUNA`s revival plan despite 90% rejection votes
Japan's banking giant Nomura set to launch crypto division
Leading Korean law firm to sue Do Kwon amid UST and LUNA ordeal