'We are not like Libra and we don’t have an ambition to replace existing currencies,' a former People's Bank of China governor says.
A former governor of the People’s Bank of China has stressed that the digital yuan is not designed to replace the U.S. dollar and euro — but says the central bank digital currency could help to shake up cross-border payments and global trade.
According to the South China Morning Post, Zhou Xiaochuan claimed Beijing has learned harsh lessons from the pushback that Libra (now known as Diem) has suffered from regulators. He added:
“If you are willing to use it, the yuan can be used for trade and investment. But we are not like Libra and we don’t have an ambition to replace existing currencies.”
Instead, Zhou said its goal is to persuade consumers and overseas businesses that there are advantages to accepting digital yuan payments.
Amid concerns that Diem could cause financial instability and undermine the sovereignty of major currencies — and fears that China is attempting to internationalize the yuan — Zhou stressed:
“We can’t push them on sensitive issues and we can’t impose our will. We must avoid the perception of great power chauvinism.”
China is streets ahead in the race to launch a CBDC, and it may be years before the U.S. and Europe launch their own digital currencies… if they do at all.
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