The former president of Bank of China provided insight into the potential mechanisms that the upcoming national digital currency could adopt while urging accelerated growth in the space.
According to Li Lihui, a transitional period could be implemented following the digital currency’s initial launch, simultaneously maintaining traditional currency and payment systems before achieving gradual adoption. Also, the digital currency may not rely on blockchain technology alone, according to a «Global Times» report citing Li at a digital currency seminar in Beijing, but would test different digital technologies to seek a better fit «since the current blockchain alone could not meet mass consumer demand».
Li also underlined the need for China to accelerate the development of its own legal digital currency in the midst of increasing competition, likely referring to other players such as Facebook’s Libra.
China continues to make progress towards the launch of a digital yuan. The People’s Bank of China said in early December that it would carry out a two-phase pilot in Shenzhen beginning in 2020 to test usage of a yuan-pegged digital coin. The pilot will involve seven large state-owned enterprises – four banks and three telecommunication companies.
