Chinese Ex-Banker Says Digital Currency Should Replace Fiat Money

A former vice president of a top Chinese bank has argued that digital currency should replace fiat in the nation's financial systems.

Yongli Wang, previously of the Bank of China, said in a WeChat post that wide use of digital currencies would encourage monetary reform, as reported by media outlet The Global Times on Sunday.

Wang, now a director of the Haixia Blockchain Research Institute, also said China would use digital currency as a substitute for cash in circulation initially, but that could impact its market competitiveness if confined solely to that role.

Digital currencies, he said, could help to bolster liquidity in an economy, while placing limits on excessive issuance of physical cash.

Wang added that preventing too much cash being printed would help maintain monetary and financial stability.

One way forward, he suggested, would be to provide exclusive "Basic accounts" on the central bank's digital currency platform for all social entities, per the report.

Bank of China is one of the nation's four biggest state-owned commercial banks.

The former VP's comments come at a time when China's biggest banks and other commercial entities have begun trialing the pilot of the central bank's Digital Currency Electronic Payment system.

The digital currency, often dubbed the digital yuan, is designed to facilitate the replacement of all the nation's cash in circulation in the coming decade.

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