China’s new sovereign digital currency could be a boon for cross-border trade while also supporting Beijing’s efforts to promote the RMB as an international currency, the former head of the country’s central bank said on Sunday, reported the South China Morning Post.
Speaking at the Shanghai Financial Forum, Zhou Xiaochuan, who stepped down as governor of the People’s Bank of China in 2018, said that one of the major benefits of using a digital system is that it allowed both payments and currency conversions to happen in real time.
A leading advocate for China’s sovereign digital currency plan, Zhou said it was important to note that the Digital Currency Electronic Payment – as it is formally known – was not intended as a replacement for globally accepted fiat currencies like the US dollar and the euro, reported the SCMP.
“If you are willing to use it, the RMB can be used for trade and investment,” he said. “But we are not like Libra and we don’t have an ambition to replace existing currencies.”