China to advance the development of state issued digital currency
China’s government remains at the cutting edge of digital payments technology with plans to further “advance” the development of an eYuan.
China’s flagship digital currency is backed by its central bank and has fast gathered pace with an initial trial gathering over 20m users and seeing transaction values top 34.5bn yuan (£3.9bn) in a matter of months.
While a timeline has not yet been set for a full roll out Yi Gang, governor of the the People’s Bank of China, today confirmed that China will continue to develop its digital asset technology.
“Going forward we will continue to prudently advance R&D of eCNY, improve its design and use,” Yi said at a Bank of Finland event.
China’s central bank plans to improve the eYuan’s privacy, anti-counterfeiting measures and increase its interoperability with existing payment methods.
Digital currencies backed by central banks (CBDCs) capitalise on the popularity of crypto by offering cheap and ultra-fast payments infrastructure. China has introduced one of the world’s most stringent crackdowns on cryptocurrencies, smothering the nascent market and instead offering the public a government sanctioned digital currency.
The progress of China’s digital currency will be watched with interest by governments worldwide. Both the Bank of England and European Central Bank have announced research into issuing a digital currency with the EU claiming that an e-euro could be operational by 2025.
In April the Bank of England and HM Treasury announced the creation of a join Taskforce to coordinate research into a UK CBDC which is ongoing. The UK’s Central Bank and Treasury today said they would kick off a consultation on the launch of a digital pound in 2022.
Read more: Bank of England to launch consultation on plans for a digital pound