China will launch an “action plan” on January 1 aimed at strengthening the management and operations of its digital currency, a vice governor of the country’s central bank said Monday.
“The future digital yuan will be a modern digital means of payment and circulation, issued and distributed within the financial system,” wrote Lu Lei, deputy governor of the People’s Bank of China (PBoC). Financial newsa media reporting to the central bank.
In the next step toward this goal, a “next generation” arrangement for the digital yuan will be launched on Jan. 1, Lu said, encompassing a “measurement framework, management system, operational mechanism and ecosystem.”
The “action plan” will see banks pay interest on balances held by their customers in digital yuan, a move aimed at encouraging wider adoption of the currency.
The plan also includes a proposal to establish an international yuan digital operations center in the eastern financial hub of Shanghai, according to the report.
Monetary authorities around the world have explored ways to digitize currencies in recent years, spurred by the rise of online payments during the pandemic and the growing popularity of cryptocurrencies such as bitcoin.
The PBoC has been working on a digital currency since 2014 and is testing the use of a “digital yuan” or “e-CNY” in various pilot programs.
Consumers across the country already widely use mobile and online payments, but the digital yuan could allow the central bank – rather than big tech giants – to access more data and control payments.
