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Yao Qian, a Chinese “crypto dad” and former PBoC director, claims that digital yuan is not a government monitoring weapon.
According to former People’s Bank of China director Yao Qian, China’s digital yuan would use smart contracts and will be geared to compete with Alipay-like payment platforms established by privately-owned companies.
Speaking at the International Finance Forum in Beijing, Qian argued that simply simulating its physical counterpart would not be enough for the digital yuan to succeed. To fully benefit from being digital, it will move toward the “smart currency” by making use of smart contracts, he added, according to local sources.
To keep up with the tides of digitization, central banks must develop the legal fiat money, he added. Qian then cited the European Central Bank, the Bank of Japan, and Canada’s central bank as examples of how to operate on smart contract-based digital currencies.
Qian reportedly said that China’s initial idea of a digital yuan was to counter the impact of private payment platforms that have become increasingly popular, possibly implying the country’s ubiquitous payments service Alipay. However, he insisted that the Chinese government did not develop the digital yuan as a surveillance tool to track all transactions in real-time:
“The digital yuan needs to achieve a balance between protecting users’ privacy and cracking down on crimes such as money laundering, tax evasion and the financing of terrorism.”
Central banks can deliver digital currencies to customers without the requirement of middlemen “if the digital dollar and digital yuan run directly on blockchain networks like Ethereum and Diem,” according to Qian. He noted that layered operations can help the central bank’s digital currency serve bankless citizens and achieve financial inclusion.
Yao Qian is the director of the China Securities Regulatory Commission’s Science and Technology Supervision Bureau. He was previously the director of the PBoC’s Digital Currency Research Lab. He has been noted for his work on digital yuan from its inception in 2014.His friendly attitude toward crypto as an official of China’s SEC counterpart earned him the moniker “Chinese crypto dad.”