Changchun Mu, the director of the Digital Currency Research Institute of the People’s Bank of China, made an intriguing announcement regarding China’s central bank digital currency (CBDC), also known as the digital yuan on September 3. Speaking at the annual China International Service Trade Fair, Mu highlighted the ongoing technological and business model upgrades that the digital yuan is undergoing, and he emphasized the desire of the digital yuan developers to see it integrated into all online retail payment options.
The digital yuan has been a significant initiative for the Chinese government, aiming to provide a digital alternative to the traditional paper currency. Mu stated that the CBDC has “undergone a major upgrade” in terms of its “organizational forms” and business model. This suggests that the central bank and relevant authorities have been actively working on refining the operational aspects of the digital yuan to make it more adaptable and versatile in various payment scenarios.
Integration of the digital yuan into popular payment platforms
One of the key points Mu raised was the integration of the digital yuan into popular payment platforms and applications used by consumers, including those operated by commercial banks, WeChat, and Alipay. He stressed the importance of these platforms complying with the regulations set forth by the central bank. In the short term, the focus appears to be on implementing QR codes for CBDC transactions, which would facilitate easy adoption by users. Simultaneously, there are plans for long-term upgrades to payment tools, although specific details about these upgrades were not provided in Mu’s speech.
Moreover, Mu touched on the issue of wholesale payments. He suggested that there might not be a need for a complete overhaul of the existing interbank payment and settlement systems. Instead, the strategy could involve integrating the CBDC payment option into the existing infrastructure, which would be a more practical and gradual approach. However, Mu did not delve into the technical specifics of how this integration would take place.
