According to the Global Times report, the central bank has clarified some details regarding the recent digital yuan, dubbed as digital currency electronic payment (DCEP), in order to address rumors regarding the scale and scope of recent pilot projects. According to the report, Chinese internet users claimed that a person in Shenzhen received a large amount of PBoC’s digital currency after selling local real estate. Several other central banks across countries are exploring digital currencies.
The test’s primary goal is to ensure DCEP operation runs smoothly.
Wang Peng, an assistant professor of the Gaoling School of Artificial Intelligence at Renmin University, said that the test’s primary goal is to ensure the digital currency’s operation runs smoothly and safely and determine how DCEP is distributed from the central bank to financial institutions. “Only when trials in retailing are successful will they be carried out in large transaction scenarios,” he added. The rumors also stated that the digital yuan could not be converted into banknotes. However, an official from the PBoC cleared the rumor and said that the digital currency is legal tender in China and can be converted into banknotes at a rate of 1:1.
Central banks across countries explore CBDCs.
Central banks across countries are currently experimenting with the idea of having central bank digital currencies. Several central banks have made some progress in this field while some are starting out. The People’s Bank of China is all set to become the world’s first major central bank to issue a digital currency. Currently, the PBoC is testing its national digital currency dubbed as DC/EP (Digital Currency Electronic Payment) in several cities across the country.
Earlier, the Bank for International Settlements released a report saying that the ongoing global pandemic has prompted central banks to accelerate their research involving CBDCs as people avoid transactions in physical money.
