China’s Central Bank, The People’s Bank of China’s (PBoC) deputy director Mu Changchun said that the digital form of the yuan will be different from Bitcoin and stablecoins.
On Dec. 22 South China Morning Post reported that the head of the digital currency research institute at the PBoC said that China’s digital currency would be a digital form of the yuan with no room to speculate on its value as it will not have any backing of a basket of currencies.
“The currency is not for speculation. It is different to bitcoin or stable tokens, which can be used for speculation or require the support of a basket of currencies.”
Mu indicated that China’s new national digital currency would operate in a two-tier system, with PBoC on top, and commercial banks in the second tier of the centralized system.
PBoC Starts Trial On Restricting Large Scale Transactions
In November, China’s central bank, The People’s Bank of China (PBoC) announced that it will pilot a restriction on large-scale cash transactions in three different regions across the country. Experts say that the move paves the way for its upcoming Digital Renminbi token (RMB).
PBoC plans to carry out a large-scale cash management trial that will last for 2 years and will be implemented in phases such as:
- Hebei Province
- Zhejiang Province
- Shenzhen City.
China’s Digital Currency To Approve International Payment And Domestic Retail Systems
In November, Ex PBoC head said China’s digital currency to approve the international payment and domestic retail systems according to a former senior official at the central bank of China.
Two types of implementation outlined in central bank digital currency (CBDC):
- The first is the electronic payment-oriented domestic retail system
- The second is the international remittances for settlements between financial institutions.