‘China not planning to replace global fiat with digital yuan’

Zhou Xiaochuan, former Governor of China’s central bank revealed today that the nation’s long-awaited Digital Currency Electronic Payment or its CBDC, digital yuan, is not being issued as a replacement to global fiat currencies such as US dollar or Euro, according to a local report from the SCMP. 

During the Shanghai Financial Forum, the official said that digital yuan would instead function alongside the currently used digital payment systems offered by nations and private operators. Advocating for China’s sovereign digital currency plan, Zhou said in a statement: 

If you are willing to use it, the yuan can be used for trade and investment… 

A month ago, the Governor of the central bank of China, Yi Gang, said that in its CBDC pilot program, the digital yuan has been used in over four million transactions totaling to more than 2 billion yuan (about $299 million) at the time

Around that time, the deputy governor of China’s central bank, Fan Yifei, had revealed that the DCEP wallets had processed 1.1 billion renminbi ($162 million) in transactions between April and August 2020. The official had also noted that PBoC had opened an aggregate of 113,300 personal digital wallets and 8,859 corporate digital wallets within the digital yuan project.

Even though China has been in the lead in terms of its CBDC project, it has not yet seemed like the e-yuan has been floated as a replacement for fiat, as Zhou noted. Moreover, the former official from the People’s Bank of China, claimed that authorities had learned from the reactions to Facebook’s stablecoin project and added how China’s CBDC was unlike Libra – which recently rebranded to Diem.  He said: 

Some countries are worried about the internationalization of yuan… We can’t push them on sensitive issues and we can’t impose our will. We must avoid the perception of great power chauvinism […]

But we are not like Libra and we don’t have an ambition to replace existing currencies.