The former People’s Bank of China (PBoC) governor, Zhou Xiaochuan, stated on a particular conference this past Sunday that the highly-awaited digital yuan is not explicitly designed to replace any presently-used fiat currencies.
Xiaochuan clarified that the upcoming Chinese central bank digital currency (CBDC) is intended to work alongside fiat currencies and not to go against it, as most people presume.
The former PBoC governor adds that the digital yuan – sometimes referred to as digital currency electronic payment (DCEP) – is purely developed with the vision of transforming cross-border investment and trade for the better.
Xiaochuan then seemingly threw a shade on the controversial Facebook crypto project, formerly referred to as Libra, by stating that the digital yuan isn’t like the Libra, which actively tries to replace present currencies.
Xiaochuan’s comments regarding the aforementioned Facebook-led initiative does not end there, though. Further into his statement, he said that China learned a lot from the many controversies and regulatory pushbacks that the Libra project encountered through its years of development. He went on to say that they are aware that some countries today are now growing weary of the internalization of the digital yuan, and thus, they do not intend to impose their will. Xiaochuan states that the PBoC respects this and is currently doing what it can not to appear overly chauvinistic.
All in all, the former governor clarified that the digital yuan only aims to be a useful tool for establishing a more transparent and accountable digital payments system within China. Countries beyond the nation should have no fear that it might one day replace their current fiat currencies.