China will advance development of eCNY, gov says

Illustration picture of the app for China's digital currency
China's official app for digital yuan is seen on a mobile phone placed in front of an image of the Chinese flag, in this illustration picture taken October 16, 2020. REUTERS/Florence Lo/Illustration

BEIJING, Nov 9 (Reuters) - China will continue to advance the development of its central bank digital currency and improve its design and usage, the People's Bank of China governor Yi Gang said on Tuesday.

China is a front-runner in the global race to launch central bank digital currencies (CBDC) and is testing a digital yuan, or eCNY, in major cities including Shenzhen, Beijing and Shanghai but has not set a timetable for its official rollout.

"Going forward, we will continue to prudently advance R&D of eCNY, improve its design and use," Yi said via video at a Bank of Finland event.

China will improve eCNY's privacy protection and anti-counterfeiting feature and increase its interoperability with existing payments tools, Yi said.

China will test eCNY's impact on its monetary policy and financial markets, he added.

Yi said the PBOC attaches great importance to the issue of personal information protection, as CBDC issuers have to balance the need between safeguarding privacy and preventing crimes.

To strike the right balance, the PBOC collects information on a "minimum and necessary" basis in eCNY applications, and strictly controls the storage and usage of personal information.

China in September issued a blanket ban on all cryptocurrency transactions and mining. Some analysts say the move is aimed at eradicating an activity that threatens China's own digital currency. read more

Yi also said eCNY aims to meet the need of domestic retail payments as cross-border digital payments involve more complicated issues, such as anti-money laundering.

The PBOC is willing to strengthen cooperation with world central banks in developing CBDC, including setting standards and rules, Yi said.

Reporting by Kevin Yao and Beijing newsroom, Samuel Shen in Shanghai; Editing by Jacqueline Wong

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