The former director of the People’s Bank of China (BPC) gave details on the possible uses of the future state crypto-yuan, as reported by Coindesk on 26 November. Xiaochuan Zhou previously headed the central bank of China, which will soon issue its stablecoin. He was speaking at a forum hosted by Caixin media in China. He explained that the “crypto-yuan” will first be destined for retail trade for users located in China.
A crypto-yuan initially intended for retail sale
But according to him, once this first step is completed, international trade could require another type of crypto-asset. “The other goal is [to propose] cross-border payments for international financial institutions,” he said. According to Zhou, the technical characteristics necessary for this project differ from the crypto-yuan as it will initially be proposed to the public. It will therefore have to expand its capabilities once it is released beyond Chinese borders. It is not yet clear what form these amendments could take.
Zhou also believes that China is not the ideal territory to test a state cryptoasset, because of its very large size and large population. He explains, “If something doesn’t work, it would be easier to change direction [in a smaller country].”
China leads crypto race
China is multiplying the signals in recent weeks to indicate that the release of its crypto-yuan is imminent. In any case, it has tackled the colossal task of regulating the mining industry and driving out fraudulent Icos, as we explained to you this month.
Faced with this, other economies are waking up and also exploring the possibility of developing stability. Last week, we learned that the American Federal Reserve had started experimenting with a digital dollar.
In any case, China should be the first large country to offer a usable virtual currency. The Venezuelan Petro pushed by Maduro has indeed not yet spread and does not appear on any exchange. If the “crypto-yuan” is a success, it should accelerate the development of other stablecoins in the global economies that have so far taken the party to observe.