FameEX Hot Topics | Bank of China Mandates Inclusion of Digital Yuan Payment Option for Retailers

As China's central bank digital currency (CBDC) undergoes advancements in both technology and business models, a significant opportunity arises to integrate it into various online retail payment systems. Changchun Mu, the director of the Digital Currency Research Institute of the People's Bank of China, highlighted this prospect on September 3 during the annual China International Service Trade Fair. Mu's address conveyed the aspirations of digital yuan developers to seamlessly incorporate the CBDC into every facet of retail transactions. He underscored the recent substantial upgrades in the Chinese CBDC, known as the renminbi, in terms of its organizational structure and business model. The current focus lies on upgrading payment tools to align with these advancements.

Mu's remarks extended to different payment platforms, including commercial banks' applications, WeChat, and Alipay. He stressed the responsibility of these platforms to adhere to regulatory standards. In the short term, Mu encouraged the adoption of CBDC QR codes, while in the long term, he urged efforts to enhance payment systems. 

In his speech, Mu also touched on the issue of wholesale payments. He proposed integrating the CBDC payment option into the existing interbank payment and settlement systems rather than undertaking a complete overhaul. Nonetheless, he didn't delve into specific technical details regarding this integration.

China's commitment to building a blockchain-backed digital infrastructure under strict control remains unwavering. In August, Chinese government officials introduced the Hangzhou Data Exchange, a novel platform powered by blockchain technology. This initiative aims to streamline the exchange of corporate information technology data using distributed ledger technology.

The initiative to integrate the digital yuan into various payment systems aligns with China's broader strategy of asserting greater control over its financial systems and fostering wider adoption of its CBDC. By emphasizing technological enhancements and integration with existing platforms, China aims to facilitate a seamless transition toward using digital currency in everyday transactions. This approach is expected to contribute to enhanced efficiency and oversight. The continuous developments in China's digital currency landscape underscore the country's determination to lead in digital financial innovations and set trends in the global financial technology sector.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.