Zhou Xiaochuan, former head of the People’s Bank of China, said the digital yuan which is the central bank’s digital currency, will first target the retail use of digital payments. Chinese Digital Yuan Will First Facilitate Retail Payments.
Xiaochuan said, “There are two goals for international digital currencies.”
Adding, “The first one, which is also what China envisions is to develop digital payment and its use for retail system in the country, while the other goal is to cross-border payment for international financial institutions.”
According to Xiaochuan, China is a challenging country to examine the digital yuan, as one with a small population would be better for testing out as the currency circulation cycle is short.
He stated, “In case there is something wrong, it will be easier to steer the boat into a different direction.”
Xiaochuan’s statement is quite meaningful as it reveals how the central bank would introduce the Digital Currency Electronic Payment.
Mable Jiang is a partner at Nirvana Capital, the Beijing-based crypto and fintech-focused venture fund. He said, “I think this is an important signal that China would start pushing retail use of DECP hard in some economies that fit Zhou’s description about smaller population and good internet infrastructure.”