Chinese Central Bank’s New Digital Currency Will “Revolutionise” Monetary System: People’s Daily

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The flagship newspaper of the Chinese Communist Party (CCP) says the People’s Bank of China’s (PBOC) launch of a statutory digital currency will have a “breakthrough,” “revolutionary” significance for the international monetary system.

Mu Changchun (穆长春), vice-head of PBOC’s payments and settlements department, said at the China Financial 40 Conference on 10 August that the release of a digital currency by the Chinese central bank was “imminent.”

In an article published on 14 August by the People’s Daily website Sun Zhaodong (孙兆东), senior economist at the China Construction Bank University’s Fintech and Big Data Research Academy, said that the “launch of a digital currency by China’s central bank possesses major, breakthrough significance.”

“It not only refers to digitisation of money under the existing monetary system, but also the launch of a completely new cryptocurrency system based on new internet technology, and in particular blockchain technology,” said Sun.

“PBOC’s launch of a digital currency is a major monetary system revolution, both domestically and internationally.”

Sun said that the launch of a central bank digital currency will “make real time collection of data on money creation, accounts and liquidity a possibility.”

“Following the desensitisation of data, technological methods such as big data can be used to conduct in-depth analysis, and provide helpful reference for the formulation and implementation of monetary policy.

“Central bank digital currency can also provide assistance with regard to anti-money laundering and anti-terrorist financing.”

Sun also points out that the central bank digital currency will differ greatly from conventional electronic payment tools, which transfer funds between bank accounts.

“Central bank digital currency can remove [the need] for traditional bank accounts to achieve value transfer, greatly reducing dependence on accounts for transactions.

“Central bank digital currency can be as easy to circulate as cash, which is of benefit to the circulation and internationalisation of the renminbi, and at the same time can be subject to controllable anonymity.”

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