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China should not rush to use digital yuan across borders

CHINA should not rush to use the digital yuan for cross-border payments due to regulatory obstacles and foreign concerns over its global impact, Zhou Xiaochuan, the country's former central bank governor, said at the Boao Forum on Wednesday.

China is one of the frontrunners in the global race to launch central bank digital currencies to modernise financial systems, ward off the threat from cryptocurrencies like bitcoin and speed up domestic and international payments.

The digital yuan, which will be mainly for domestic retailing payments, is likely to be used for cross-border payments but it faces complex issues such as restrictions on money laundering and terrorist and gambling funding, Mr Zhou said.

Cross-border payments via digital yuan are not easy, he said. "We cannot rush it." The digital yuan would depend on the Chinese currency's global status being determined by China's economy, currency stability and convertibility, said Mr Zhou, who until 2018 was China's key architect and driver of its global yuan ambitions.


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