One objective of the central bank of China’s first digital currency is to facilitate retail payments, says a former senior official said on Monday.
Speaking at the Forum in Zhuhai Hengqin Caixin, a former head of the People’s Bank of China Zhou Xiaochuan said it will emphasize retail use digital payment for digital yuan, according to media reports from Caixin.
“There are two goals for the international digital currency,” Zhou said. “The first, which is also what China’s vision is to develop and use digital payment for retail systems in the country, while the other goal is to cross border payments to international financial institutions.”
According to Zhou, two of these goals will require different technical designs for digital yuan, and China may expand the capabilities after applying digital payment functions in retail.
Zhou said China is a difficult environment to test new digital currency, and a country with a smaller population could be better due to the circulation of the currency cycle is shorter.
“In case there is something wrong, it will be easier to steer the boat in a different direction,” he said.
Although Zhou was no longer working as the head of China’s central bank, his speech could be a meaningful message from the authorities in terms of how the bank will launch a digital currency DCEP (Digital Currency, Electronic Payment).
The Chinese government has traditionally sends a signal of a former senior official software before making an official announcement, said Mable Jiang, a partner at Nirvana Capital, a venture capital firm based in Beijing specialized in financial technology.
“I think this is an important signal that China will start pushing hard DECP retail use in countries that are in keeping with Zhou on a smaller population and a good internet infrastructure,” Jiang said.
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