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Zhou said that holders of the digital yuan can use it for trading or investment. He added that, unlike Libra, they “don’t have an ambition to replace existing currencies”.
The former governor of the People’s Bank of China (PBOC), Zhou Xiaochuan, said that the digital yuan is not a threat to fiat currencies. The former governor of China’s central bank, PBOC, said the issuance of the digital yuan is not to replace fiat currencies. He further noted that the digital yuan will not take the position of the US dollar.
Zhou commented on the digital yuan during the Shanghai Financial Forum on the 13th of December. He noted that the digital yuan would function along with existing digital payment systems. The former governor added that the intention is not to replace the US dollar or the Euro with the Digital Currency Electronic Payment (DCEP).
Former PBOC Governor Comments on Digital Yuan
The former head of the PBOC said that a major advantage of the digital system is its ability to allow both payments and currency conversion in real-time. As noted in a report by the South China Morning Post, Zhou said:
“If the currency exchange is realised at the moment of a retail transaction, and there is oversight of that exchange… it brings new possibilities for interconnection.”
Over time, there have been successful tests of the digital yuan. In early November, PBOC governor Yi Gang said that over 2 billion digital yuan had been spent in pilot testing in four cities across the country. He said the transactions occurred in about 4 million separate transactions. In total, the use of digital yuan is almost $300 million.
Despite the successful pilot tests of the digital yuan, Zhou noted that the purpose of the digital currency is not to contend with globally accepted fiat currencies like the US dollar or the Euro. Speaking further at the conference, he mentioned:
“Some countries are worried about the internationalization of yuan. We can’t push them on sensitive issues and we can’t impose our will. We must avoid the perception of great power chauvinism.”
Zhou: We Are Not Like Libra
Speaking further, Zhou said that holders of the digital yuan can use it for trading or investment. He added that, unlike Libra, they “don’t have an ambition to replace existing currencies.”
The former governor said that Beijing aims to persuade consumers and international merchants to accepts payments with the digital yuan.
Initially, the Libra Association planned to back its stablecoin with a basket of fiat currencies like the Singapore dollar, the US dollar, yen, and the pound. However, the association could not live up to its ambitions due to criticisms from the governments. Now, the Libra Association has announced a change of name to the Diem Association. The newly-rebranded association hopes to separate itself from the original Facebook-led vision. The Diem Association announced its new name in a press release on the 1st of December.
Also, the 27-member Diem Association has elected new executives in addition to the existing ones. The new leaders are Steve Bunnell as the chief legal officer and Dahlia Malkhi as the chief technology officer. Another newly-elected executive is Christy Clark, who will serve as the chief of staff. Also, Kiran Raj as the executive vice president and deputy general counsel.