Former PBOC Governor Confirms China Is 'On Track' For Completion Of Central Bank Digital Currency

China’s central bank digital currency (CBDC) development is in its final stages, according to the former governor of the People’s Bank of China (PBOC), indicating a significant stride towards the country’s digitalization of its financial system.

What Happened: Zhou Xiaochuan, the longest-serving governor of the PBOC, expressed that the development of the CBDC in China is “already on track” and is nearing its end, reported The South China Morning Post. Zhou made this announcement during a conference in Hong Kong, which was organized by the Hong Kong Monetary Authority (HKMA) and the Bank for International Settlements (BIS).

Zhou, who stepped down from his role at the PBOC in 2018, disclosed that “90% of retail payments in China are already digitalized,” leaving a mere 10% to be transitioned. Upon the completion of the CBDC, the government will have the potential to explore additional features such as cross-border payments and tokenization applications like smart contracts.

The HKMA-BIS High-Level Conference, commemorating the anniversaries of both the HKMA and the BIS representative office for Asia-Pacific, welcomed over 20 incumbent central bank governors and deputy governors, as well as eight former governors. The conference is set to continue on Tuesday, where Pan Gongsheng, the current Governor of PBOC, is scheduled to deliver a keynote speech.

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Zhou stressed the importance of digital currencies’ mobility and convertibility, data protection, and privacy concerns as crucial areas of study for the PBOC and other banking bodies.

Despite the global economy dealing with higher, long-term interest rates and rising inflationary pressures, Zhou’s remarks reflect a solid commitment to digital currency innovation in China.

Why It Matters: This development comes in the backdrop of Standard Chartered Bank (China) joining China’s CBDC pilot testing, becoming the first foreign bank to do so. The bank, collaborating with City Bank Clearing Services, has initiated offering digital yuan exchange services to customers.

As China accelerates its CBDC project, it is expected to have far-reaching implications for the global financial system and the digital currency landscape. The completion of the CBDC is a crucial step in China’s digital currency journey and a significant milestone for the global adoption of digital currencies.

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