Central Bank Digital Currency Will Gradually Replace Traditional Monetary and Payments Tools: Ex-Bank of China Head

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The former head of one of China’s big state-owned banks says the statutory digital currency slated for imminent release by the Chinese central bank will have sweeping implications for the country’s finance and monetary systems.

Li Lihui (李礼辉), former head of the Bank of China, said that China’s launch of a central bank digital currency is very likely “transitional” in nature.

According to Li the focus of the launch will be “succession and replacement,” meaning maintenance of existing monetary market mechanisms and monetary policy transition mechanisms, as well as gradual replacement of traditional monetary and payments tools.

Li made the remarks on 13 January at the “Future of Digital Currency” (数字货币未来) research symposium held by Peking University’s National School of Development.

Officials from the People’s Bank of China (PBOC) announced towards the end of 2019 that the launch of its central bank digital currency was “imminent,” although they have yet to release a detailed timeline.

Ac­cord­ing to a re­port from Sina at least 15 com­pa­nies are help­ing PBOC with the de­vel­op­ment of its statu­tory dig­i­tal cur­rency, in­clud­ing big state-owned banks, Chi­na’s big three tele­coms com­pa­nies and some of its lead­ing tech com­pa­nies. 

These com­pa­nies re­port­edly in­clude: 

  • In­dus­trial and Com­mer­cial Bank of China (ICBC),
  • Agri­cul­tural Bank of China (ABC), 
  • Bank of China (BOC), 
  • China Con­struc­tion Bank (CCB), 
  • China Mo­bile, 
  • China Tele­com, 
  • China Uni­com, 
  • Ten­cent, 
  • Huawei.

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