China will launch an “action plan” on Jan. 1 to boost the management and operations of its digital currency, a deputy governor of the country’s central bank said on Monday.
“The future digital yuan will be a modern means of digital payment and circulation issued and circulated within the financial system,” People’s Bank of China (PBoC) Deputy Governor Lu Lei wrote in a statement. financial newsa media outlet dependent on the central bank.
In the next step toward that goal, a “next-generation” agreement for the digital yuan will be launched on Jan. 1, Lu said, encompassing a “measurement framework, management system, operating mechanism and ecosystem.”
The “action plan” will see banks pay interest on balances held by customers in digital yuan, a move to incentivize wider adoption of the currency.
The plan also includes a proposal to establish an international digital yuan trading center in the eastern financial center of Shanghai, according to the report.
In recent years, monetary authorities around the world have been exploring ways to digitize currencies, driven by the rise of online payments during the pandemic and the growing popularity of cryptocurrencies such as bitcoin.
The People’s Bank of China has been working on a digital currency since 2014 and has been testing the use of a “digital yuan” or “e-CNY” in several pilot programs.
Online and mobile payments are already widely used by consumers across the country, but the digital yuan could allow the central bank, rather than big tech giants, to access more data and control payments.
