The ex-head of research at the People’s Bank of China (PBOC) said the digital yuan could use smart contracts to compete with payment systems.
In his speech at the International Financial Forum in Beijing, Yao Qian said that for the successful introduction of the digital yuan, it is not enough for him to become a digital analogue of the state currency. To realize its full potential, the government must make the digital yuan a “smart currency” through the use of smart contracts.
Qian believes that central banks will be able to introduce their own digital currencies that can be used without the involvement of intermediaries if they operate on the Ethereum blockchain. In this case, government stablecoins will bring more benefits to people who do not have access to financial services.
The former NBK researcher is convinced that central banks should “modernize” fiat currencies through digitalization. He cited the example of the European Central Bank (ECB), the Bank of Japan and the Central Bank of Canada, which began to explore the possibilities of state-owned cryptocurrencies.
Earlier, CPPCC member Chen Chunxing said the digital yuan would help the Chinese government track cash flows to fight corruption. However, according to Qian, the NBK’s digital currency is not a real-time tracking tool. The digital yuan was created to counter payment platforms such as Alipay, which have become increasingly popular over time.
“The digital yuan must find a balance between protecting user privacy and fighting money laundering, tax evasion and terrorist financing,” Qian said.
Today, Qian is the director of the Science and Technology Development Supervisory Bureau of China Securities Commission (CPPCC). Qian took an active part in the development of the digital yuan, and for his friendly attitude towards cryptocurrencies received the nickname “Chinese Crypto Dad”.
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