China is expected to be one of the first major economies to issue a central bank digital currency (CBDC). But the Governor of the People’s Bank of China, Yi Gang, in a rare interview said that there is no timetable for the release of the digital yuan and even stated there is a possibility it may not be issued.
This follows the recently leaked digital yuan wallet screenshots from testing the CBDC and an article in a state newspaper that provided more details. Despite the Governor’s comments, testing has ramped up. A state newspaper even ran a cartoon based explainer targeted at the general population.
Governor Gang was talking to reporters from the Financial Times and China Finance as part of the Two Sessions, the annual conferences where China’s parliament convenes. Below is the digital renminbi excerpt from Governor Gang (using Google Translate):
“At present, the digital economy is an increasingly important driving force for global economic growth. The development and application of legal digital currency is conducive to efficiently satisfying the public’s demand for legal currency under the conditions of the digital economy, improving the convenience, security and anti-counterfeiting level of retail payments, and accelerating China’s digital economy development.”
“The People’s Bank of China started research on legal digital currency earlier. In 2014, a special team was set up to start special research on issues such as digital currency issuance framework, key technologies, issuance and circulation environment, and relevant international experience. At the end of 2017, with the approval, the People’s Bank of China organized some strong commercial banks and relevant institutions to jointly develop the research and development of the digital RMB system (DC / EP). DC / EP has basically completed the top-level design, standard formulation, function development, joint debugging test, etc. under the premise of double-layer operation, cash (M0) substitution, and controllable anonymity.”
“At present, the digital RMB research and development work follows the principles of stability, safety, controllability, innovation, and practicality. First, internal closed pilot tests are conducted in Shenzhen, Suzhou, Xiong’an, Chengdu, and future Winter Olympics scenarios to verify theoretical reliability and system stability. Performance, function availability, process convenience, scenario applicability, and risk controllability.”
“However, the current pilot test is still a routine work in the research and development process, and does not mean that the digital RMB will be officially issued. There is no timetable for when it will be officially launched.”