China’s central bank has sent one of its strongest signals yet of a commitment to creating a digital version of the yuan.
“The People’s Bank of China (PBoC) will undoubtedly further its research and development of the national digital currency with enhanced top-down design,” the bank said in an April 4 notice.
The notice is a summary of the 2020 National Currency Gold Silver and Security Work Video and Telephone Conference, convened on Friday by Yifei Fan, the central bank’s vice governor. One of the annual meeting’s goals was to lay out top priorities for the bank in this coming year.
While this was at least the third time a digitized yuan, or Digital Currency Electronic Payment (DCEP), was mentioned in the annual meeting, the unequivocal language used indicates a firmer stance on the project than before.
At the 2018 meeting, the bank said it would pursue the project “at a steady pace.” Last year, it said it would “accelerate” the process with a closer look at trends in cryptocurrency space at home and abroad and more strict supervision over online financing in 2019.
While the initiative is a few years old, it may have added impetus from coronavirus-related concerns about physical banknotes. At a Feb. 15 press conference, the central bank said it would disinfect and store cash for seven to 14 days before it takes it in, and put 600 billion yuan of new cash in circulation.
Researchers at the Bank for International Settlements (BIS) recently said the coronavirus pandemic could encourage digital payment adoption and inspire more talks about digital currencies among central banks across the world.
Along with the push for DCEP, the PBoC aims to reform the system to issue and withdraw cash and other issues to better manage cash circulation, according to the notice from the latest meeting,
Other priorities on the bank’s agenda include strengthening a crackdown on counterfeit money and testing programs to manage large quantities of cash.
Besides departments in the PBoC, officials from major state-owned commercial banks joined this meeting, according to the notice.