Beijing: China will launch an action plan on January 1 aimed at strengthening the management and operation of its digital currency, a senior official of the country’s central bank said on Monday.
People’s Bank of China (PBoC) Deputy Governor Lu Lei said the digital yuan is intended to function as a modern form of digital payment and circulation issued within the formal financial system. Writing in Financial News, a publication affiliated with the central bank, Lu said a “new generation” framework for the digital yuan would come into effect at the start of the year.
The updated framework will include a measurement system, management structure, operating mechanisms and a broader ecosystem for the currency, he said.
As part of the action plan, banks will begin paying interest on digital yuan balances held by customers, a move aimed at encouraging wider public adoption. The plan also proposes setting up an international digital yuan operations centre in Shanghai, China’s financial hub.
Central banks globally have stepped up efforts to develop digital currencies in recent years, driven by the surge in online payments during the pandemic and the growing popularity of cryptocurrencies such as bitcoin.
China has been working on its digital currency since 2014 and has conducted multiple pilot programmes for the digital yuan, also known as e-CNY. While mobile and online payments are already widespread in the country, the digital yuan could give the central bank greater oversight and control over payment data, reducing reliance on major technology platforms.
