The Digital Currency Electronic Payment (DCEP) stands as the national digital currency of China. Zhou Xiaochuan, the former governor of the People’s Bank of China, stated that the Chinese central bank digital currency (CBDC) isn’t aiming to replace fiat currencies of the world, such as the Euro or the Dollar. This statement came by way of the South China Morning Post in its report.
No Plans To Overtake Regular Fiat Whatsoever
Speaking at the Shanghai Financial Forum, Xiaochuan explained that this digital Yuan could be used for trade and investment should the investors in question want to use it. However, he was quick to distance the DCEP from Libra, now known as Diem, as the former Chinese official stated that China doesn’t plan on replacing any existing currency.
Even so, the South China Morning Post was quick to highlight that the digital currency of China could stand as a boon for any form of cross-border trading with the country. This, in turn, could see the digital Yuan be promoted as an international currency.
Maybe DCEP Could Help: Zhou
Zhou said something along those lines, as well. He explained that if a retail transaction can realize currency exchanges in real-time, at the moment of its execution, could bring brand new possibilities for interconnection. This, of course, is assuming that the relevant oversight over these currency exchanges can be enacted, but it would quickly solve the cross-border remittance issues.
Zhou claims that China will seek to persuade both overseas merchants and consumers to accept digital yuan payments, as opposed to challenging the status quo in the monetary and FX world.
Using The Soft Touch
Zhou explained that many countries are scared of China internationalizing its Yuan. He, however, managed to state that China won’t force its will on these countries, and won’t push them on sensitive issues. While many would disagree with such a sentiment, Zhou urged that his country must avoid the perception of “great power chauvinism” his country is known for.
This approach claimed to be China’s new MO stands in contrast to that of Diem, formally known as Libra. Diem, at the time, tried to enter the international currency world with a bang, which would ultimately cause massive destabilizations. China, however, is aiming for a long-term plan for its DCEP, doing its “soft touch” tactics in the process.
Throughout these past few months, two test programs tested the mettle of China’s DCEP, with the most recent one having launched in Suzhou back on Friday.