The former vice president of the Bank of China says digital currencies can replace cash in circulation.
The former vice president of the Chinese central bank campaigned for the digital currencies issued by the central bank to be positioned as a replacement for cash in circulation.
Wang Yongli, former vice president of the Bank of China and director of the Haixia Blockchain Research Institute, said digital currencies could certainly be a substitute for cash, but according to the Global Times, they shouldn’t be limited to that.
Wang said that digital currencies can change currency structures. This can include configuring “base accounts” for all social units in a central bank’s digital currency platform. In this way, the bank can monitor digital currencies without significantly affecting the current financial system.
He added that a digital currency improves the effectiveness of monetary policy by avoiding excessive spending of physical paper money.
His comments come as more and more central banks are considering introducing digital currencies. The Bank of China was at the forefront of plans to introduce the digital yuan. China has not yet released details on the digital yuan, but some industry insiders believe that the China Dream may not make it the dominant currency.. Other central banks started exploratory commissions in digital currencies. The Bank of Japan has recently appointed its research leader for its digital currency foray, and the Philippines has announced plans to investigate its digital currency.