China’s Central Bank, the People’s Bank of China (PBoC) is looking to revise the current banking law to legalize the Digital Yuan and prohibit the development of any tokens pegged to the digital Yuan in the country.
The PBoC is involving public input according to its official announcement which stated that the revised draft will be accepting feedback from the public up to November 23.
China’s official currency the Renminbi will now have two official forms, the physical form, and the new digital form.
“The People’s Bank of China has actively promoted the revision of the “People’s Bank of China Law of the People’s Republic of China” and drafted the “People’s Bank of China Law of the People’s Republic of China (Revision Draft for Solicitation of Comments)”, which is now open for public consultation opinion.
Citizens can either send their opinions via email or fax.
The Digital Yuan Won’t Be Duplicated Through Digital Tokens
The draft seeks to exclusively stop any person or organization from pegging any other digital tokens to the digital Yuan.
“Any individual or entity shall not make or issue any tokenized note or digital tokens that replace the Renminbi’s circulation in the market.”
The PBoC also seeks power to indefinitely stop and impose a heavy fine to any persons that will be found guilty of trying to replicate the digital Yuan once it is officially legalized in China.
“The PBoC will halt such activities and forfeit any proceed from the making and selling of Yuan-backed digital tokens and issue a fine that is up to five times of the involved proceeds.”
China’s DCEP Is Highly Centralized
China’s PBoC is among the top central banks in the world with a definite plan to launch a digital token. However, with each new development, China is proving that it is looking to gain more control rather than allow more financial freedom in the country.
A recent report indicates that the PBoC has so far received a total of 15 patent applications that give an insight into the high level of centralization and surveillance capability of the Digital Currency Electronic Payment. (DCEP).
As the world’s second-largest economy, China has been highly speculated to use the digital Yuan as one of the top tools to compete with the US for the top position by replacing the dollar as the world’s reserve currency.
“DCEP will be successful because there are a lot of Chinese people living outside of China- there are 39 million Chinese living outside of the country, if they have a connection with China, they will use DCEP. They can make DCEP become an international currency.”