Xi Jinping urges China to lead in digital currency regulation

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Xi Jinping has called on China to lead the way in the implementation of a comprehensive digital currency regulatory framework. The Chinese president made the rallying call in a recent speech in which he advocated for the digitization of his country’s economy.

Xi Jinping’s pro-blockchain stance has played a big part in China’s move to become a global blockchain hub. In his speech in October 2019, he declared that the Asian country was ready to embrace blockchain “on virtually all levels.” The statement came following his government’s study on the impact of blockchain on the economy which revealed that the technology would play a big role in delivering China’s economic targets.

In his latest remarks, Xi is advocating for global digital currency regulations. In a recent speech, the president stated: “We need to take advantage of the momentum and accelerate the digitalization of various fields including our economy, society and government, as well as proactively participate in creating the international regulatory framework on digital currency and digital tax.”

His remarks come just days after the People’s Bank of China proposed amendments to the country’s laws to integrate the digital yuan. The PBoC’s draft law seeks to amend the law to state that China’s official currency, the Renminbi, includes both a fiat and digital form. If passed, the draft law will give the digital currency electronic payment (DC/EP) legal status in China.

While President Xi has called for digital currency regulations, his government has been anti-digital currency for years now. Its hostile stance has seen some of the largest exchanges leave the country and shift operations to Europe and other Asian countries. It has also driven millions of traders to over-the-counter (OTC) trading platforms, a sector the government is now closely monitoring.

Whether Xi will follow up on his remarks and spark China’s involvement in global digital currency regulations is anyone’s guess. If he does, it would go a long way in harmonizing the vastly varying regulatory standpoints held by different countries globally. Despite being worth close to $400 billion, the digital currency industry is yet to be properly regulated, with most jurisdictions choosing a wait-and-see approach.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

See also: CoinGeek Live panel on Regulation of Digital Assets & Digital Asset Businesses