There have been some controversies surrounding the creation of the digital Yuan. The digital Yuan was designed to streamline cross-border trade and fast settlements of transactions. Last week, several cities in China set up different activities to promote and give innovation exposure amongst locals.
Crypto enthusiasts frequently followed the currency’s creation during its earlier phases. The Asian country is taking a bold step to optimize its financial transactions for a uniformed exchange. Even the most promising inventions have criticism against it, as numerous sources claim the digital Yuan was created to eradicate the use of the dollar in the global market.
Former chief explains why digital Yuan was created
The former governor of people’s bank of China, Zhou Xiaochuan, assured the public that the new tech would not destabilize the global monetary system which has dollar has its standard currency. He revealed that the digital currency electronic payment(DCEP) was not a threat to real currency and could therefore not replace it.
The ex-chief asserts that the digital currency was made primarily to remove hurdles involved in cross-border trading and give the Yuan some needed exposure globally. The financial expert believes that the currency should be embraced because it was created to ease transactions.
Zhou explained that the digital Yuan was not made to replace real currency like the controversial Libra team. The Facebook subsidiary has faced a backlash from the public after some unpleasant threats on suing the firm for using already registered brand names.
Federal governments are also not too welcoming on the idea of Diem in Europe, as German Finance minster encouraged European countries not to allow the firm to operate. The central issue governments cited was that powers on currency cannot be given to private individuals and that Diem lacked a transparent regulatory framework. The Facebook payment system finally announced its coming launch even amidst the criticism.
Digital Yuan could be the future of modern payments
The newly launched tokens were issued by the central bank of China, which would assure people’s trust in the payment system. The token is also pegged to a real currency which is China’s Yuan that will help the crypto stabilize its value, unlike the other volatile assets.
The most populated country in the world is not the only one developing technology for achieving a uniformed payment system. The European Union is also working to create its own central digital ‘Euro’ which would be making transactions faster amongst the countries.
The governor is also of the opinion that the currency could be used internationally for trade and investments if the global community is willing. He also suggested the world is sensitive to China’s currency being used for international transaction and assured that China was not imposing its currency on people.
The banker, however, revealed that persuasion would be made in the international market to allow the adoption of the digital Yuan for transactions. The new development was also successful due to researches concerning the areas where Libra was lacking and used it to create the advance tech.