China’s proposed digital currency could trigger global use of the yuan, according to the CEO of American cryptocurrency financial services firm Circle.
The People’s Bank of China (PBOC) last month announced that it’s close to launching its own digital currency, saying that the rationale behind the move is to “protect” its foreign exchange sovereignty.
China’s central bank plans to launch its digital token through a two-tier system, under which both the PBOC and commercial banks would be legitimate issuers.
“I look at this really meeting several goals. But, I think the bigger opportunity here is this is a way for the Chinese yuan to be distributed globally,” Circle CEO Jeremy Allaire told CNBC’s “Squawk Box” on Wednesday.
“This becomes a mechanism by which (the yuan) can be used in everyday transactions all around the world,” added Allaire, an internet entrepreneur who also founded video streaming firm Brightcove. “It’s ultimately a foundation for the internationalization” of the yuan.