PBoC Governor Says There’s No Timetable for Digital Yuan Launch
While central bank digital currencies have been the talk of the industry for at least a year, few have managed to garner as much attention as China’s digital yuan did. With the country racing to get to the forefront of blockchain development, investing both money and resources into creating a digital version of its national currency has become a priority.
The push to become one of the first countries in the world to put its currency on a blockchain, save for Venezuela’s petro, has put China into a difficult position trying to live up to the promises it made. That’s why it’s no surprise that we’ve been hearing a lot of speculation regarding the development and launch of the digital yuan.
The Governor of the People’s Bank of China (PBoC), Yi Gang, said that there was “no timetable” for the release of the digital yuan. He even went as far as saying that, while small, there was a possibility that the digital yuan may not be issued.
During the country’s “Two Sessions” meetings at the National Congress, Gang said that some of the country’s largest commercial banks have been involved with research and development of the digital yuan since 2017. This process, he told China Finance, follows the principles of stability, safety, controllability, innovation, and practicality and is tested in Shenzhen, Suzhou, Xiong’an, Chengdu, and future Winter Olympics scenarios to verify the system’s theoretical reliability and stability.
“However, the current pilot test is still a routine work in the research and development process and does not mean that the digital RMB will be officially issued. There is no timetable for when it will be officially launched,” Gang told reporters.
Nonetheless, there has been a lot of speculation regarding the launch of digital yuan. Leaked images showing that some of China’s largest banks, including the Agricultural Bank of China, are already testing alpha versions of their own digital yuan platforms which further fueled the rumors.
The Global Times reported that the country might be rolling out its digital currency sooner than expected in order to use it as part of the large-scale post-COVID-19 stimulus. Cao Yin, a Beijing-based blockchain industry insider, told the Global Times on Tuesday that the accelerated launch of the digital yuan will also be used to combat potential threats to Chinese financial institutions coming from the U.S.
“Although the U.S. hasn’t put Chinese financial firms and institutions onto its Entity List, the US may still pose widespread threats to Chinese institutions and impact the yuan’s standing in international settlement. In this regard, China’s state-run digital currency may be rolled out sooner than expected to counter a possible U.S. block,” Yin said.
With China getting ready to implement major changes to its fiscal policy, such as raising the deficit-to-GDP ratio to over 3.6 percent and cutting taxes and fees paid by corporations by over $350 billion this year, Yin’s estimate means that the digital yuan could see the light of day in just a few months.
However, rumors such as these should be taken with a grain of salt. While it’s possible that Chinese officials are trying to keep the work around the digital yuan secret and mislead the public about how far it has developed, the most trustworthy source regarding the digital RMB is still the PBoC.