The Digital Yuan Will Help Develop China’s Digital Economy, PBoC Governor Says

The development of China’s national digital currency is getting exponentially faster as the year progresses. After President Xi Jinping first announced his support for blockchain last year, both the private and the public sectors in China have been racing to introduce more real-world applications for the technology. One of those applications includes the digital yuan, China’s digital national currency issued on a blockchain.

There’s been an abundance of news regarding various pilot projects involving the digital yuan in the past several months, with the latest major development coming from China’s own national bank. According to a report from the overseas print edition of the People’s Daily, the governor of the People’s Bank of China believes that the digital yuan will be the main driving force of China’s path towards establishing a digital economy. 

Governor Yi Gang’s comments on the importance of digital national currency were made during the 3rd Digital China Summit earlier this month in Fuzhou. The event was sponsored by the State Internet Information Office, the National Development and Reform Commission, the Ministry of Industry and Information Technology, and the People’s Government of Fujian Province, and focused on innovation-driven digital transformation. 

According to Chain News, the governor said that the development and real-world applications of China’s digital currency will enable the government to drastically improve the convenience and security of retail payments. Aside from that, Yi noted that the government has identified a growing need for a digital currency, which is why it’s important that it speeds up its launch. The success seen by the recent distribution of the so-called “red packets” to citizens in Luohu was what enabled the government to realize that the citizens were quick to adopt the novel payment system.

The governor’s remarks weren’t the only important highlights from the summit. Local reports have shown that more than 8000 people attended the event where over 200 companies showcased their latest digital technologies and their applications. The event saw a total of 426 deals signed, with projects showcased there attracting over 330 billion yuan in investments. 

Several high-up executives from China’s tech giants such as Tencent, Baidu, and Alibaba spoke at the event, all agreeing that the huge increase in online sales the country saw this year left a huge hole in the market. A hole that, according to all parameters, can only be filled with the digital yuan.

“In the first half of this year, the country’s online retail sales increased by 7.3 percent year-on-year, and the digitization of the entire consumer side is still accelerating,” Xi Dan, the senior vice president of Tencent, said during the summit. 

Robin Li, the chairman, and CEO of Baidu, believes that China’s main goal should be to transition to a digital economy and that every industry should move in that direction as well.