China to Focus on Domestic Use of Digital FX First, Zhou says

(Bloomberg) -- China’s initial plans for a digital currency weren’t motivated by considerations of cross-border use and it will focus on the domestic use of any such currency first, the former head of China’s central bank said.

There are many issues with using a digital currency across national borders, according to former People’s Bank of China Governor Zhou Xiaochuan. International use could affect monetary policy independence, and it’s important it isn’t used for crime, he said Sunday on a panel at the Boao Forum in China.

China’s central bank is currently testing the use of a ‘digital yuan’ in various pilot programs across the country. There’s no timeline for rolling this out nationwide, but the PBOC intends to increase the scope of its tests, Deputy Governor Li Bo said on the same panel.

The central bank is planning to test the cross-border use of the digital yuan at the 2022 Beijing Winter Olympics, where it could be used by both domestic users and athletes and visitors from overseas, Li said.

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