China has proposed a set of global guidelines on Central Bank Digital Currencies (CBDC) to help other central banks towards the development of their respective CBDCs. The announcement comes in the wake of many western countries showing great interest in launching their sovereign digital asset as the world moves towards a more digital future in the wake of the coronavirus pandemic.
China is currently leading the CBDC race as its digital Yuan is currently in the testing phase with pilot programs running in several provinces of the country. It started working towards developing its digital currency after banning crypto trading in the country nearly 6 years ago.
Mu Changchun, the director-general of the PBOC’s digital currency institute, laid out the new proposals at a Bank for International Settlements seminar and said,
“Interoperability should be enabled between CBDC (central bank digital currency) systems of different jurisdictions and exchange. Information flow and fund flows should be synchronized to facilitate regulators to monitor the transactions for compliance.”
While China is currently in the final stages of CBDC roll-out many other European countries like Germany and Britain have started their work towards a CBDC. The likes of Japan and South Korea are currently in the testing phase with several sandbox programs running in the respective countries.
China’s Progress in the CBDC Field Make Western Counterparts Accelerate Their Plans
China is currently at the forefront of the CBDC development, something the likes of the US perceive as a monetary threat to the US Dollar’s dominance in the international trade markets.
Many countries have even called for speeding up their CBDC plans in the wake of China’s rapid development.
Last year Chinese President has even called for the rapid adoption of blockchain technology as it would become an integral part of the financial system.
