A person counts 100 yuan RMB banknotes with the Chinese flag in the background.
Sheldon Cooper | SOPA Pictures | Light Rocket | Getty Images
China’s Guangzhou said on Thursday that although the world’s second-largest economy actually bans the use of cryptocurrencies, the Central Bank of China said on Thursday that interest in China’s digital renminbi project may be partly driven by the soaring bitcoin price.
The People’s Bank of China (PBOC) regards it as a method of advance payment. It is actually a digital version of legal tender. Since 2014, the central bank has been studying digital currencies.
In an interview with reporters, Wang Xin, director of the Research Bureau of the People’s Bank of China, said that people’s interest in the digital renminbi market is “very strong and everyone is paying close attention.”
CNBC said in his Mandarin translation: “On the one hand, this is related to the participation of more and more central banks in the world in the development of domestic digital currencies.”
Many central banks around the world, including Japan, the United Kingdom, Sweden, and Switzerland, are exploring the issuance of their own digital currencies. China can be said to be the most remote.
Wang said: “On the other hand, this (interest) may also be related to the sharp increase in the price of Bitcoin.”
The price of Bitcoin has repeatedly hit record highs in the past few months. This year alone, it has more than doubled.
But China’s digital yuan is not like Bitcoin.
The latter is a so-called decentralized cryptocurrency, which means that it does not have a central authority (such as a central bank) to control it. Bitcoin can also work on a technology called blockchain, and it is not clear what the digital renminbi will be based on.
There will be more digital RMB pilots in the future
So far, the People’s Bank of China has not given a timetable for launching a digital renminbi nationwide. But it has already carried out many actual pilot projects in cities across China.
These usually come in the form of lottery tickets. People in these cities can apply for a portion of digital renminbi and spend it at participating retailers.
During the Lunar New Year in February, the relevant authorities distributed approximately US$1.5 million in Beijing. Other major cities such as Shenzhen and Chengdu also have their own experiments.
Wang said that pilots are “increasing and the scope is expanding.” He hinted that more trials will be held.
He said: “In the next step, we will promote the digital renminbi pilot program and accumulate more experience.”