China’s Central Bank Head Wants to Accelerate Digital Yuan Public Launch

The deputy head of China’s central bank, Chen Yulu, has hinted at a possible acceleration of the digital Renminbi’s development and issuance (RMB).

In a statement, Yulu, the deputy governor of the People’s Bank of China (PBoC), said that the central bank-backed digital currency (CBDC) has the potential of being a key pillar in the country’s financial infrastructure by being “independent [and of] high quality.”

Furthermore, Chen opined that its research, development, and issuance, should be fast-tracked. Notably, its accelerated rollout should be utilized to show that the digital yuan is secure when used to pay for goods and services.

Dual Circulation

Chen’s views come barely months after China introduced dual circulation, an economic strategy supported by domestic demand to foster a strong future growth of its financial infrastructure. Additionally, the economic model is meant to act as a cushion against economic and geopolitical vibrations, such as those experienced between China and the United States.

In an article appearing in a magazine linked to the PBoC, Chen added that the dual circulation model would work best if infused with fintech innovations.

This comes days after news broke that the country is planning to airdrop approximately 10 million of its fiat currency through the digital RMB to kickstart the currency’s testing phase. The rumors were later confirmed when the airdrop started. Recipients of the free coins were chosen through a lottery that settled on 50,000 beneficiaries.

As of now, thousands of stores across the country are ready for the new digital yuan.

Recipients took to Twitter to announce the recipient of the free tokens and where they are spending them. For example, one of the recipients went to a local convenience store in Shenzhen to purchase a drink.

A Cooperation Without China is a Great Loss

Interestingly, it appears that China is going at it alone, having yet to announce any partnerships with other digital currency projects across the world.

Apart from China, other countries are testing a CBDC, with some forming a coalition. For instance, the European Union, Bank of Japan, US Federal Reserve, Bank of England, and the Swiss National Bank, issued a joint statement last week indicating a possible collaboration in developing a government-supported digital currency.

Although China has not announced any cooperation with international bodies, it’s recent activities hint at an impending rollout. It’s also projected that the country will expand the currency’s pilot to other regions in the country, as well as other areas that the currency can be a good fit.

Unfortunately, according to Raymond Young, an economist with ANK Bank, it would be a great loss to the global economy if the collaborations in digital currencies happen without China, considering its economic muscle.