China’s central bank claims that there is no fixed timetable for the launch of digital yuan. The public trials will soon start, but the People’s bank of China still needs more time to officially roll out the sovereign digital currency.
Top-Level Design is Completed
People’s Bank of China chief Yi Gang said in an interview that “there’s no timetable for an official launch of a digital yuan” but the bank has “basically completed the top-level design, standard formulation, function development, joint debugging test, etc. under the premise of double-layer operation, cash (M0) substitution, and controllable anonymity.”
He goes no to say that People Bank of China still requires more time to verify “the reliability of theories, stability of the system, usability of its functions, convenience of the process, applicability in different sites as well as the ability to control risks.”
Digital Yuan to Resist US Dollar
In April, the news media outlets start making speculations that Chinese digital currency is going to launch soon. But the governor’s statement has confirmed that it is not happening soon as they need more time for it. However, the tests will come soon as “routine parts of the research and development process.” It is also said that the launch of digital yuan is necessary to minimize the authoritative rule of the US dollar over the global financial system.
“Although the US 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 US block,” Cao Yin, a Beijing-based blockchain industry insider said while talking to the Global Times.
Yi also claimed that the government has allowed many government banks and financial institutions to experiment with sovereign digital currency. Currently, the test is running in four different pilot cities, including Xiong’an, Shenzhen, Chengdu, and Suzhou.
Currently, various countries are researching on digital currencies and have a plan to roll out state-issued blockchain-based currency in the future. But China was the first economy to start work on digital currency back in 2014.
The attention towards creating cryptocurrency gained after the announcement of Libra by Facebook in 2019. Due to US financial obstacles, they then decided to create stablecoins backed by different fiat currencies.