Zhou Xiaochuan talks about digital renminbi: banks, third-party payment institutions, etc. are all in one boat
Will the digital renminbi, which is being piloted, replace the U.S. dollar? Is it closely linked to the internationalization of the RMB? What is the relationship with third-party payment? Zhou Xiaochuan, President of the Chinese Society of Finance and Honorary Dean of the Wudaokou School of Finance, Tsinghua University, clarified and explained the digital renminbi disputes at the 2021 Tsinghua Wudaokou Global Finance Forum on May 22.
“The development of DC/EP (digital currency and electronic payment) is mainly based on the modernization of domestic payment systems, keeping up with the pace of the digital economy and the Internet era, improving efficiency and reducing costs, especially for retail payment systems. It was originally designed The purpose and direction of efforts did not intend to replace the U.S. dollar’s status as a reserve currency and the status of an international payment currency.” Zhou Xiaochuan said.
In response to the assertion that DC/EP and e-CNY (digital RMB) want to replace the current third-party payment role, Zhou Xiaochuan said, “I think this is also a kind of falsehood.”
He said that the DC/EP plan is a two-tier system, and the entire R&D team is organized by the People’s Bank of China, with major commercial banks, telecom operators and several major third-party payment institutions participating in the R&D. On the boat, of course, people on the same boat sometimes have different opinions, and sometimes there may be disputes on some issues, but after all, it is on the same boat. It is not that some people say that it is a kind of infighting, who will replace Who said it”.
Regarding the impact of the advancement of the digital renminbi on the internationalization of the renminbi, he said that the modernization and digitization of the renminbi payment system will help improve the status of the renminbi and increase the cross-border use of the renminbi to a certain extent, but it is not very helpful. The internationalization of the renminbi depends more on system and policy choices, and more on the progress of my country’s reform and opening up, rather than on technical factors.
In response to the discussion about controllable anonymity, Zhou Xiaochuan stated that the concept clearly proposed by China’s DC/EP is called controllable anonymity. From the point of view of controllable anonymity itself, it is not a point that can be precisely located mathematically, but what it means It is to protect privacy and anti-money laundering and anti-drug transactions, to find a balance in the middle.
“Everyone can further study where this balance point is, but don’t take this matter to belittle or attack the process of DC/EP either deliberately or deliberately.” Zhou Xiaochuan said.
Author/ Translator: Jamie Kim
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