- Governor Yi Gang, confirms that the launch date for the digital Yuan is not yet scheduled.
- Digital Yuan could be used in the 2022 Winter Olympics.
- Coronavirus (Covid-19) pandemic could speed up launch of digital Yuan.
In an interview with the Financial Times, the governor of the People’s Bank of China (PBOC), Yi Gang, spoke about China’s digital currency, the digital Yuan. Gang said in the interview that the PBOC still does not have a date for the official launch of the CBDC (central bank digital currency). The interview was conducted at the “Two Sessions”, an annual conference of a 2,000-member advisory body and the National People’s Congress.
As reported by CNF, at the end of last year China launched its test phase for the digital Yuan. The digital Yuan is available at four cities: Chengdu, Suzhou, Shenzhen, Xiong’An. The goal of this test is to prove the digital Yuan as an electronic payment method and also as a digitally currency. The PBOC will also test the initiatives of partner financial institutions and other economic entities to create use cases for the population. Gang said, that there is no fix timetable:
(…) still a routine work in the research and development process, and does not mean that the digital (Yuan) will be officially issued. There is no timetable for when it will be officially launched.
Test during Beijing 2022 Winter Olympics
The CBDC could face its biggest test before its launch in two years’ time. The PBOC Governor outlines that the digital Yuan could be used during the Beijing 2022 Winter Olympics. That way, PBOC will be able:
(…) to verify theoretical reliability and system stability. Gang added, ‘conducive to efficiently satisfying the public’s demand for legal currency under the conditions of the digital economy’.
A possible participation of McDonald’s, Starbucks, Subway and other restaurants was recently announced as part of the test phase of the digital Yuan. The announcement was made as part of a meeting of the group in charge of promoting the digital Yuan. Further details on the participation of these industry giants remain unknown.
Yi Gang also said that even without a scheduled launch date, the development and implementation of the Digital Yuan in China’s economy could be accelerated by the coronavirus pandemic (Covid-19). In this way, China would seek to mitigate the effects of possible U.S. sanctions on the Asian country:
Although the US hasn’t put Chinese financial firms and institutions onto its Entity List, the US may still pose widespread threats to Chinese institutions and impact the yuan’s standing in international settlement. In this regard, China’s state-run digital currency may be rolled out sooner than expected to counter a possible US block.
Although there are no known technical details about the digital Yuan, another representative of the People’s Bank of China said the digital Yuan will differ from Bitcoin because it will not be suitable for speculation and its value will not be subject to a basket of currencies like Facebook’s Libra. Its operation will be handled only by the PBOC, although it is expected that the CBDC issuance will also be handled by allied financial institutions.