The director of digital finance at China’s Peking University has highlighted that the People’s Bank of China may need to closely evaluate the pros and cons of loosening strict capital controls for its digital yuan.
Speaking last Thursday during an online discussion hosted by the South China Morning Post on central bank digital currencies (CBDCs), Huang debated the potential financial risks of internationalizing the yuan. He referred to the technology as a “double-edged sword”.
Beyond the domestic advantages that the central bank is currently promoting in creating a more competitive payments system, there are significant benefits to be derived from the digital yuan. These include money-laundering prevention and enhanced monitoring to help authorities detect economic risks faster. But the technology also allows bad actors to move rapidly.
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