Former PBOC official says China’s digital yuan is little used: Caixin
CHINA’S central-bank digital currency is little used, a former official of the People’s Bank of China (PBOC) said on Wednesday (Dec 28), financial news outlet Caixin reported.
Expressing disappointment with the result of a trial in select provinces and cities, the former official, Xie Ping, told a conference that application of the so-called digital yuan needed to be widened.
“The cumulative circulation of the digital yuan in the two years of the trial has been only 100 billion yuan (US$14 billion),” he said. The figure showed that “usage has been low, highly inactive.”
“The results are not ideal,” Xie, a former PBOC director-general of research, said at the conference on digital finance held by Tsinghua University, according to Caixin.
Central bank digital currencies are digital tokens, similar to cryptocurrencies, issued by central banks. China has been a leader among several countries that are developing the new means of exchange.
“What needs to change is the digital yuan acting only as a substitute for cash and only for consumption,” Xie said.
SEE ALSO
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
“Cash, bank cards and China’s third-party payment mechanisms have formed a payment market structure that has met needs for daily consumption,” he said. “The common people are used to it, and changing it is difficult.”
Digital-yuan business had no synergistic effect and no commercial benefits in banks’ business, he said. Meanwhile, third-party payment systems, such as Alibaba Group’s Alipay, offered a more attractive range of functions, such as investment, insurance and consumer lending.
To address the problem, usage of the digital yuan could be expanded – for example, by letting individuals buy financial products with it, Xie said. Also, it could be connected with more payment platforms, to move into more consumption situations. REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
Morgan Stanley strategists see inflation as key for path of US stocks
US: Wall Street opens higher as rate-cut hopes linger
Tyson raises outlook as lower costs boost chicken segment
US dollar soft on renewed Fed rate cut bets; yen on back foot
Possible class action lawsuit against Cordlife by customers could take at least 2 years
SAP extends CEO Klein’s contract until 2028