China CBDC: PBOC to continue Digital Yuan development despite CBDC scam

By Sunil Sharma
November 9, 2021 Updated November 9, 2021
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The latest development in China’s Central Bank Digital Currency, post the controversial CBDC scam, saw the People’s Bank of China reinstate its determination towards expanding and advancing the development of Digital Yuan. According to Reuter’s exclusive coverage of the Bank of Finland event, where the PBOC governor, Yi Gang spoke remotely about the Chinese authorities plan to improve the design and usage of Digital Yuan.

“Going forward, we will continue to prudently advance R&D of eCNY, improve its design and use.”, said Yi.

After the CBDC scam, Chinese authorities have guaranteed to improve the privacy protection and anti-counterfeiting features of Digital Yuan along with increasing its interoperability with existing payments tools. Furthermore, according to Yi Gang’s speech, China also plans to begin testing its CBDC’s impact on the nation’s monetary policy and financial markets.

Additionally, the governor noted that Digital Yuan will now also be focused on domestic retail payments in China. With China’s central bank’s digital currency crossing $10 billion in capitalization, along with over 140 million downloads of the government’s digital currency wallet, the authorities deem it ideal to work on improving design and usage instead of imposing an absolute ban like it did on cryptocurrency in the nation. The exceptional amount of approximately $9.7 billion transactions have been successfully processed via Digital Yuan. However, authorities have not announced an official launch date for the same, while the country continues Digital Yuan’s testing phase post its debut at the China International Import Expo (CIIE).

China’s Digital Yuan Scam

Earlier this month, the authoritarian Chinese government fell face first when its promises of a secure and regulated digital currency failed with the first-ever CBDC scam in China. The Xinmi Public Security in collaboration with the Anti-fraud Center of the Zhengzhou Public Security Bureau arrested 11 suspects in the Fujian Province for illegally using digital Yuan to launder money. The authorities disclosed that China’s CBDC was being used as a medium to further launder money for an overseas fraud group hiding in Cambodia in the scam.

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