China confirms its economic strategy: its central bank will set up an international center to promote the digital yuan. Will this give its MNBC a central role?
China bets on its digital yuan
The Central Bank of China announced today the creation of this new center. Based in Shanghai, the international center for promoting the digital yuan will aim to boost the distribution of digital currency.
The governor of the People’s Bank of China, Pan Gongsheng, noted the unprecedented emergence of stablecoins and MNBCs:
These innovations] enable real-time settlement at the point of payment, which profoundly reconfigures the traditional payment infrastructure and significantly shortens the cross-border payment chain.
Pan Gongsheng noted, however, that these developments posed “challenges” for financial regulation. The digital yuan was designed as an MNBC that would be tightly controlled by the Chinese government.
The digital yuan, which aims to compete with the dollar, will need to be adopted on a large scale to fulfill its ambitions. This point was emphasized in the Central Bank’s statement
The center [aims to] promote the internationalization of the digital yuan and develop its use in financial markets by supporting innovation in digital finance.
