Zhou Xiaochuan, the current head of the Chinese Finance Association and a renowned former governor of the People’s Bank of China, believes that the country’s introduction of digital currency is in favor of its domestic retail system and that it is aimed at preventing the dollarization of China’s economy.
Xiaochuan shared to guests at the Eurasia Forum, held on October 27, that the main focus of the People’s bank in creating its own central bank digital currency is significantly different from that of the major economies in the G7, which are the US, the UK, France, Italy, Canada, Germany, and Japan.
He believes, that the G7’s biggest concern is in relation to “the challenges raised by Bitcoin, Libra, and smaller digital currencies,” while those of China are more focused on utilizing its virtual currency for retail payments done domestically and hinder the US dollar from becoming a more commonly used tool of exchange on the domestic market.
“In China, we are working extremely hard to push forward the DCEP — meaning our digital currency — plus the electronic payments as a whole. However, the focus and the main goal of our concept are very different from the G7 ones,” he highlighted.
“We must prevent dollarization. In fact, this is one of the leading designing vectors of the Chinese digital currency,” he noted.
China is working to formally introduce the digital yuan before the Winter Olympics in Beijing scheduled for February 2022.
