While addressing a press conference, the Governor of the PBOC, Zhou Xiaochuan was asked about the development of digital currency. To which he responded that the People’s Bank of China had organized digital currency related seminars more than three years ago, followed by the establishment of a research institute and had jointly conducted R&D about distributed ledger technologies with the industry.
He disclosed that that there was a digital currency currently being developed by the Central Bank and it is called the DCEP – Digital Currency, Electronic Payment.
While the governor maintains that the direct transactions between Bitcoin and other virtual currencies is not supported as well as the ability of raising funds through ICOs (Initial Coin Offerings), he finds “the development of digital currency is not only an inevitability of technological development, the traditional banknotes and coins may gradually shrink in the future, and may not even exist one day.”
But the Governor stands firm that the research on the direction of virtual assets transactions needs to be more prudent especially with respect to the implementation in big countries like China. He stressed that the bank would still need to consider the overall financial stability and prevent the inherent risks involved in such technical solutions to safeguard consumers. A hasty implementation would lead to many consumer suffering losses. The digital currency is gradually being tested and will be implemented and promoted only when it is reliable. It will serve the real economy and prevent it from becoming a product of excessive speculation.
It should be able to provide convenience and lower the cost associated with retail payment systems. It must also be secure and provide privacy to the people without clashing with the financial stability of the country.
A plan for R&D for implementing the currency will be introduced at a future date.
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