Xiao Gang, former chair of the China Securities Regulatory Commission, said in his latest book on China’s capital market reforms that the development of a central bank digital currency (CBDC) will pave the way for digital action.
Stocks and currencies are completely separate entities in traditional finance, but blockchain-based digital currencies blur the lines between the two and open up new opportunities. Xiao adds that “In the future, digital stocks will be the natural product of a digital currency.”
Before this can happen a number of challenges They have to be examined in theory and practice. This includes: how to connect CBDC with the digital capital market, how to prepare smart contracts for the issuance of digital stocks and how to use digital currency for trading and settlement of digital stocks.
In addition, the former president believes that The digital currency will continue to play a very important role in the development of digital finance in the future:
“The digital currency will impact and affect the issue, circulation, settlement, pricing of assets, trading in assets and other currency-related systems in different countries and regions.”
As reported Cointelegraph before, Xiao said China is facing a shift to a digital economy and needs to legislate for a rapidly growing cryptocurrency market.