Expert: The digital currency developed by the Central Bank of China will replace paper banknotes

Representatives of the People’s Bank of China (PBoC) confirmed their intention to speed up the development of their own digital currency, which, as experts suggest, is likely to replace traditional paper banknotes. This writes the AMBCrypto , citing the statement of the Central Bank of China on August 2.

Also, the financial regulator of China noted that it will monitor the latest trends in the development of virtual currencies – both at home and abroad.

In July, the head of PBoC's research division, Wang Xin, suggested that the Facebook initiative with the launch of the Libra project would force Chinese authorities to speed up work on their own digital currency, which they have been studying for the past few years.

In a commentary to BJNews, Wu Changhai, deputy dean of the Institute of Capital and Finance at China University of Political Science, said that such a digital currency could replace bank notes, would be an obstacle for people engaged in illegal activities, and also help transform the country's financial infrastructure.

He is also convinced that, due to the existing government model, Libra from Facebook will not be able to replace the fiat currency of China and will not have any serious impact on its digital counterpart.

“Legal digital currency is a substitute for bank notes. It is issued by the central bank. The digital currency itself has no monetary functions. The government cannot transfer distribution rights to a [private] company. It will be impossible to implement this idea for a long time, ”said Wu Changhai.

We note that earlier the ex-chairman of PBoC, Zhou Xiaochuan, suggested that the Chinese authorities could consider the Hong Kong model for creating a digital yuan, which involves issuing money by commercial enterprises under the supervision of the central bank.

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