[UPDATED] PBoC Governor: Digital Currency Could Replace Cash In China

The governor of the People’s Bank of China has suggested that physical money may be supplanted by its digital counterpart in the country.

  • UPDATED | March 9, 2018:

    The People’s Bank of China is currently developing a digital currency, known as the DCEP, or Digital Currency (for) Electronic Payment, according to a report from the Beijing Youth Daily.

    ORIGINAL | March 9, 2018:

    Physical cash may one day be overtaken by digital currency in China and could even become obsolete, according to People’s Bank of China (PBoC) governor Zhou Xiaochuan. In a January 2018 op-ed, the bank’s vice governor had pitched the concept of a centralized digital currency with properties that would allow the PBoC to verify transaction data.

    Zhou made the comment at a March 9 press conference, which was held as the annual Two Sessions gathering was taking place. Three days earlier, a speaker at the Two Sessions had also discussed blockchain technology.

    The central bank’s governor, who is expected to retire soon, said that the PBoC is taking a look at digital currencies as it searches for less costly, more convenient modes of payment.

    He reportedly qualified this expression of interest in the technology by cautioning parties that are developing blockchain solutions to thoroughly test their products, services, and platforms before releasing them to the public, and by denigrating the trend of cryptocurrency speculation.

    “We don’t like creating products for speculation and making people have the illusion that they can get rich overnight,” he related.

    In 2017, Chinese authorities ordered the closure of virtual currency exchanges by October 31 of that year. Several of these platforms continued to operate from abroad, and earlier this month, the media house Caixin reported that China’s government was blocking some of those companies’ WeChat channels.

    The government has apparently been cracking down on cryptocurrencies that it considers fraudulent, and on related firms, in the first quarter of 2018. On February 4, a PBoC-linked publication revealed that the country would use its “great firewall” to prevent citizens from accessing offshore digital asset exchanges and investing in foreign ICOs.

    In January 2018, it emerged that China was also trying to bring an end to cryptocurrency mining within its borders. 

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