"China needs to become the first nation to issue a digital currency."
This is what can be read in an article published in China Finance, a magazine of the Chinese central bank (PBoC), according to Reuters.
The goal would be further internationalize the yuan and reduce its dependence on the global dollar payment system.
In fact, according to China Finance, the rights to issue and control a digital currency will become a “new battlefield” for competition between sovereign countries, and the issuance of digital currencies by central banks would bring important changes to the current one. global financial system.
In this sense, the PBoC itself points out that the country would gain many advantages and opportunities to issue its digital currency (DC / EP), and therefore should accelerate in this direction to reap the benefits before the others, especially as the digital one. The currency could improve the implementation of monetary policy and thus better support the post-pandemic economic recovery, as well as help break the international monopoly of the dollar.
It should be added that until yesterday, the yuan appreciated significantly against the US dollar, going from $ 0.1415 at the beginning of July to $ 0.1480, with a gain of more than 4.5% in less than two months. Today, however, after the publication of the China Finance article, it has lost 0.46%.
It is possible that the PBoC aims to devalue the yuan against the dollar, to help exports, following the growth of recent months, and perhaps a digital currency could help to do so, for example, by distributing money directly to citizens, as was done for example. in the United States in the midst of an emergency pandemic.
Digital currency, China is serious
Meanwhile, field testing of the already working DC / EP prototype is underway, so much so that local media are reporting that some of China's major state commercial banks have already started large-scale internal testing.
Furthermore, a DC / EP research unit has already applied for 130 patents for this new digital currency, which would form a complete supply chain to support its launch.
As a result, it is now clear that China is really taking it seriously, although the timeline is still unclear.