Bank AI

China’s central bank, the People’s Bank of China (PBOC), is spearheading the nation’s evolution into digital finance, emphasizing the importance of security, cost-efficiency, and misuse prevention. Zhou Xiaochuan, the bank’s former governor, recently shared his insights at a Beijing forum, clearly showing the nation’s trajectory in the world of central bank digital currencies (CBDCs).
Zhou highlighted security as the paramount concern, especially given the critical nature of finance and currency. Moreover, as technology becomes more affordable and systems are more user-friendly, the potential for misuse also escalates. Hence, measures against abuse are essential. This includes combating money laundering and illicit trades, which, as Zhou pointed out, frequently leverage cryptocurrencies and stablecoins to facilitate transactions.
Significantly, the e-CNY, China’s official CBDC, has been under rigorous testing since its pilot app’s introduction in January 2022. State media Xinhua reported that trials for this digital yuan had been conducted in 26 sites across 17 provincial cities, including prominent hubs like Beijing and Shanghai, by April. These expansive tests underscore China’s commitment to refining and enhancing its CBDC infrastructure.
Additionally, Zhou delved into the e-CNY’s unique two-tier system. The PBOC resides at the top layer, overseeing the currency’s issuance, while the second tier comprises commercial entities, tech platforms, and telecom operators. This architecture, Zhou explained, ensures the digital currency’s dynamic evolution. It enhances service quality and drives innovation through competitive means, a pivotal aspect for such a vast country.
Besides domestic considerations, Zhou shed light on the crucial aspect of cross-border transactions with CBDCs. He stated that they represent a significant exploration area for these digital currencies. It’s not just a matter of technology and systems; policy direction plays a crucial role. For instance, Hong Kong’s active testing of the e-CNY for cross-border payments exemplifies this, as they proceed to the second phase of technical trials.

PBOC emphasizes security in China’s digital finance evolution

Cryptopolitan_News

Other articles published on Oct 13, 2023

Nu Holdings Stock Gains 11%: Is It Time To Ride The Trend?

How Other Countries Responsibly Harness AI Potential with AI Regulation – Exclusive Report

French Regulator Concludes DeFi Public Consultations, Views Ecosystem as “Disintermediated”

NSC Stock Forecast: By Year-End, Can (NYSE: NSC) Jump Above $300?

Why JPMorgan Launches Platform to Tokenize Financial Assets?

Bitcoin Price Continues to Struggle as Bearish Sentiment Looms

Join our free newsletter for daily crypto updates!