China has proposed a number of global rules for Central Bank Digital Currencies (CBDCs) during a seminar at the Bank of International Settlements (BIS), Reuters reported on 25 March.
According to the publication, the set of rules were proposed by the director of China’s Digital Currency Research Instituted, Mu Changchun, who said that CBDC fund flows should be synchronized to assist regulators in monitoring the transactions for compliance. He further advised the gathering of monetary authorities that its important to enable interoperability between CBDC systems from different jurisdictions. Changchun said in a statement:
“Information flow and fund flows should be synchronised so as to facilitate regulators to monitor the transactions for compliance. We also propose a scalable and overseen foreign exchange platform supported by DLT (distributed ledger technology like blockchain) or other technologies.”
During the seminar, the official from the People’s Bank of China (PBoC) also said his country was developing its digital yuan as a “back-up” payment option for Alipay and WeChat Pay, which he claimed were responsible for 98% of the mobile payments in China, Bloomberg reported on 26 March. He further said China needed the CBDC in case “something bad” happened to Alipay and WeChat Pay, which would definitely have a “negative impact” to the financial stability of China.
The country is also expanding its digital yuan tests, with the six major state-owned banks now allowing members of the public to apply for a digital yuan wallets in Shanghai and Beijing, Beijing Business Times reported on 24 March. The applications, however, will not be automatically approved, with the PBoC stating that it will review each application on a case-by-case basis. An employee at the Postal Bank of China told the publication:
“Although the application criteria has not loosened up, we’ve opened it up to the public so the process is less restrictive than before. As the review process goes digital, the speed of getting applications approved will be much faster later on.”
Citizens interested to participate in the CBDC trial will need to fill in their real names, ID and mobile phone numbers, email and employee names. If approved, users will be able to download the digital yuan wallet, which will have a payment limit of 1,000 yuan daily.