Fan Yifei, the Deputy Governor of the People’s Bank of China (PBC), has been fired. Since 2015 he has been responsible for payments and financial technology, including the digital currency department. On the topic of the digital yuan, the main PBC staff that have given speeches about the central bank digital currency (CBDC) were Fan Yifei and Mu Changchun, who leads the Digital Currency Research Institute, a division of the PBC.
The official one line statement says, “Fan Yifei, a member of the Party Committee and Vice President of the People’s Bank of China, is suspected of serious violations of discipline and law, and is currently undergoing disciplinary review and supervision investigation by the Central Commission for Discipline Inspection and the State Supervision Commission.”
In the West, that might be considered an investigation. However, according to the Chinese press, the investigation has concluded, and he has been sacked. He no longer appears on the leadership page of the People’s Bank of China. And it is effectively the end of his career at the age of 58 after being apprehended on Friday afternoon.
In August, Zhang Qingsong became a PBC Deputy Governor and took over payments. He has highlighted the need to strengthen the supervision of large payment platforms.
However, Fan Yifei was in charge of payments when Ant Group – the owner of Alipay – had its stock listing abruptly suspended in 2020 and a monopolies investigation started.
Some media outlets note that Fan Yifei has been interviewed multiple times during the past year. The reasons behind the investigation are unclear, but several have speculated that it relates to the payment industry. In recent years, more than 200 organizations with payment licenses have been found to have management and supervision problems.
And this might be a sign that there could be further crackdowns.
On the other hand, one journalist expressed shock, having met Fan Yifei several times and describing him as a soft spoken academic type. Before he joined the central bank, Fan Yifei worked for the China Investment Corporation for five years, and prior to that, the China Construction Bank, where he reported to Wang Qishan, the current Vice President of China. Until 2017 Wang was the second most powerful man in China.
While Wang is still in office, many of his associates appear to have been targeted by anticorruption investigators, as the Wall Street Journal reported.
The big question is whether his departure will have any impact on the digital currency initiatives. Apart from the retail CBDC, there is also the multi-CBDC MBridge project for cross border payments with the BIS and central banks of Hong Kong, Thailand and the UAE. This could help the renminbi to be used more in cross border trade.