Digital Renminbi Focuses on Daily Payments, Not Cross-Border Transactions: Zhou Xiaochuan

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The former head of the Chinese central bank has stressed the role of China’s new central bank digital currency (CBDC), also referred to as the digital renminbi, in improving the convenience and ease of payments for daily retail purposes.

Speaking at the 2022 China (Beijing) Digital Finance Forum ( 2022中国(北京)数字金融论坛) on 8 September, Zhou Xiaochuan (周小川), said that while other central banks had focused on the role of CBDC’s for the purposes of cross-border transactions, in China the emphasis would be on increasing the convenience of daily payments.

“The focus of digital currencies in the US and Europe has been on cross-border payments,” Zhou said. “The digital renminbi should place the emphasis on the retail segment, and can provide convenience to daily payments for various demographics.”

According to Zhou the digital renminbi is part of China’s “modern public financial infrastructure” that serves as “a major upgrade of the central bank payments system.”

“It encompasses both technical upgrades, as well as upgrades to the organisational structure and operational model,” Zhou said. “This upgrade achieves unification and integration of the national payments market, breaks through payments barriers, upgrades user experience, and provides key foundational support for the development of digital finance.”