In response to the claim that the digital yuan has replaced the U.S. dollar and third-party payments, Zhou Xiaochuan, president of the Chinese Society of Finance and former governor of the People’s Bank of China, explained at the 2021 Tsinghua Wudaokou Global Finance Forum that DCEP (digital currency and electronic payments) is not intended to replace the U.S. dollar, and that replacing third-party payments is also a delusion.
Zhou Xiaochuan said the development of DCEP is mainly based on the modernization of the domestic payment system, keeping pace with the digital economy and the network era, improving performance and reducing costs, especially for the retail payment system, which was originally designed for the purpose and direction of efforts not to replace the status of the U.S. dollar as a reserve currency and international payment currency, the surging news reported.
Zhou Xiaochuan said. In response to the argument that DCEP and the digital yuan are trying to replace the current role of third-party payments, “I think this is also a delusion.” The DCEP plan is a two-tier system, and the entire research and development team is organized by the People’s Bank of China, with major commercial banks, telecoms providers and several major third-party payment institutions participating in the research and development.
“We are all in the same boat, and of course people in the same boat sometimes have different opinions, and sometimes there may be disputes on some issues, but after all, we are in the same boat. It’s not what some people say as if it’s a kind of infighting and who will replace who.” He said.
In response to the impact of the digital yuan push on the internationalization of the yuan, he said the modernization and digitization of the yuan’s payment system will help to a certain extent to improve the status of the yuan and its cross-border use, but it is not too much help.
RMB internationalization depends more on institutional and policy choices and more on the progress of the mainland’s reform and opening up than on technical factors.
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