The former head of the Chinese central bank has called for the use of a competitive selection process to explore the development of an official digital currency.
Zhou Xiaochuan, former governor of the People’s Public of China (PBOC), said that the constant evolution of technology makes it risky to settle for a single technological option, and for this reason China should devise a “multi-channel mechanism” for the research and development of digital currencies that enables different plans to compete against each other.
“The central bank can arrange for research in this area, but it has no means of guaranteeing which research plan will be the best,” said Zhou at the 9th Caixin Summit on 18 November.
Zhou presided over the launch of the Digital Currency Research Institute of the People’s Bank of China just prior to his retirement in March 2017, following the establishment of a specialist research team at the start of 2014 to discuss technical and regulatory issues in relation to the development of a state digital currency.
The former PBOC head also highlighted the need to distinguish between the needs of a central bank digital currency and a private sector digital currency.
“Once this distinction is made clear, it shows that the growth of digital currencies and digital payments can potentially proceed via multiple plans, and advance and develop amidst competition.”