China has conducted experiments in several major cities, including Shenzhen and Shanghai, in the worldwide race to establish central bank digital currency (CBDC).
The People’s Bank of China (PBOC) said in a white paper released on its website that the country will primarily use the digital yuan for domestic retail payments while studying trial programs for using the digital currency for cross-border payments.
The cross-border payment pilots would be based on honoring China’s monetary sovereignty while also complying with the regulations of the countries concerned, according to the statement.
China’s previous central bank governor, Zhou Xiaochuan, stated in April that due to regulatory hurdles and international concerns about the digital yuan’s global impact, China should not hurry to deploy it for cross-border payments.
According to the bank, the PBOC will expand its research on the effects of a digital yuan on monetary policy, the financial system, and financial stability.
The central bank warned that cryptocurrencies are mostly used for speculation, posing a risk to financial security, and that they could be used for money laundering and other criminal activities.
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(Judy Hua and Kevin Yao contributed reporting.)
Peter Graff and Kim Coghill edited the piece.)/n
