China, Singapore Explore the future of CBDC at the World Economic Forum

[Cordillerabit]

Financial authority figures from China and Singapore provided a glimpse of how, with the suggestion of an interoperability agreement between the nations, the international roadmap for central bank digital currencies (CBDCs) could play out.

CoinDesk Chief Content Officer Michael Casey moderated a virtual World Economic Forum (WEF) panel on the impact of CBDCs, asking what the plan for the digital yuan is in terms of how it fits into the international strategy of China.

The market will largely decide the future of the digital yuan, said Zhu Min, chairman of China's National Financial Research Institute, pointing to the influence of payment systems, capital flows and currency exchange.

Also, I think it depends on the agreements of countries and governments," Zhu said." "So, let's say if Singapore was willing to move the Chinese digital currency to Singapore and China was willing to accept the digital currency of Singapore, maybe both nations could sign an agreement to work on those things."

Casey asked if a digital yuan would give China a better chance to compete with the U.S. dollar's primacy as a global reserve currency on the subject of the internationalization of the renminbi and giving it a great role in trade.

"First of all, I don't think there's a plan," Zhu, a former People's Bank of China deputy governor, said. Secondly, I don't think we're going to use a tool to compete against the dollar. I don't believe that the [CBDC] is moving in that direction.

Those that promote the concept of a digital dollar, like the former U.S. Christopher Giancarlo, Chairman of the Commodity Futures Trading Commission, pointed to privacy concerns around the Chinese digital currency. So, in the context of interoperable, cross-border arrangements, would this be a viable concern?

'I don't really see that as a big issue,' Zhu said. Obviously, the internal architecture and also the technical networking paths can be very distinct if you go one step backwards. So, when the market gradually develops, these problems need to be solved.

Soure: Bityard