China’s central bank aims to challenge the global financial status quo by digital currency

China’s sees concrete benefits in being the first to launch a digital currency, according to China Finance, a magazine from the People’s Bank of China (PBoC).

Reported by Reuters on September 21st, the article said that among the benefits of the digital currency – dubbed DCEP, for digital currency electric payment – would be the weakening of the dollar’s role in international finance in favor of the yuan.

“China has many advantages and opportunities in issuing fiat digital currencies, so it should accelerate the pace to seize the first track,” the article, which was published on the weekend, said.

The Coronavirus also helps promote China’s digital currency development.

Moreover, data feedback from a PBoC-issued digital currency would be beneficial for national monetary policy, all the more crucial in a post-pandemic landscape fraught with economic challenges.

It added that a PBOC digital currency research unit has filed 130 patent applications related to cryptocurrency ranging from issuance, circulation to application as of end-April. Those functions would form a complete supply chain to support the launch of a digital currency.

In April, the PBOC’s digital currency institute told Reuters it was conducting internal trials of a digital currency electronic payment system in four cities and that it intended to pilot the system at future Winter Olympics venues.

Last month, Beijing announced a trial run of its digital yuan in Shanghai, Beijing, Guangzhou and Hong Kong, involving 400 million people, or roughly 29% of the country’s population.

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