Digital Yuan Is ”Progressing Smoothly” Says People’s Bank of China

According to the latest reports of People’s Bank of China (PBoC), the development of digital yuan as national digital currency is ”progressing smoothly”.

The official news release from January 5 states that the report was published during a working conference in Beijing from January 2-3.

Five years of work

It took five years of research and development to make digital yuan a central bank digital currency (CBDC). Its first real world pilot occurred last year in December.

Unlike anonymous and decentralized cryptocurrencies, digital yuan will be under control of PBoC and 100% backed by funds paid by commercial organizations.

As reported, the PBoC provided a peek into the progress of the CBDC on a conference dedicated to “studying and implementing the spirit” of the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China from October 2019, and annual Central Economic Work Conference, held in December.

PBoC President Yi Gang and the Chinese Communist Party Secretary Guo Shuqing presented a brief summary of PBoC work in 2019 and defined the bank’s main tasks aimed at fostering ”socialism with Chinese characteristics” in 2020.

Under the guidance of the Party Central Committee and the State Council the bank will proceed with ”countercyclical adjustments” to China’s monetary policy, harnessing financial risks and continuing with liberalization of national economy.

Beijing and global blockchain industry

There is no definite answer as to the influence of China’s CBDC and state-regulated blockchain on decentralized protocols. Analysts monitor Chinese government for signs of possible changes in its treatment of such concepts as regulation, censorship and interoperability.

Recently Wulf A. Kaal, a PhD at emerging technology consulting firm Kaal.io, made remarks similar to those made by Ethereum co-founder Joe Lubin:

“We would be able to debate what ‘decentralized’ will mean in the case of China. If we agree that ‘decentralized’ would mean, at a minimum, a token that is censorship-resistant, autonomous, and anonymous, it is hard to see the Chinese government facilitating that.”