China’s Goals Behind Digital Yuan

Michael Sung, a professor at Shanghai’s Fudan University, shared his viewpoint regarding the growth of digital yuan and blockchain projects in China.

How high stakes are? And what is China actually doing? Sung had some interesting answers.

“So I think the world kind of noticed on Oct. 24 when [Chinese President] Xi Jinping stood up and basically announced two major things for that week,” he stated. “First, there was something called the fourth plenary sessions for the CPC (Chinese Communist Party). It’s one of the most important high-level government meetings to decide the strategy of what’s happening in China. Then they said they’re going live with the digital currency that they had been in planning since 2014.”

Sung has been monitoring the new currency project for almost half a decade as Chinese Communist Party has created its plans for a nation-wide digital solution. He believes that the party pushed the project forwards, reacting to Facebook’s Libra. He commented:

“Because of the Libra situation, Mu Changchun, who is the head of the official Digital Currency Research Institute, ran back to Beijing and held a special workshop for all the Communist officials and decided, ‘OK, get in front of this.’ But actually, in my opinion, that was the lesser of the news happened that week.”

“The second piece of news was Xi Jinping announcing the country’s blockchain strategy,” said Sung. This had far more significant meaning, because, as Sung said, China’s president himself announced the digital yuan. In China, it is regarded as official permission, which will attract attention of other governments, according to Sung.

He said:

“This means it’s serious business and I think the implications of this blockchain strategy will be felt around the world because what it indicates [is] that China has developed a national strategy. All the big players are trying to get in the game. But this is signaling that the central government [is] stepping in and sort of taking a central role.”