China’s digital yuan ‘at forefront globally’, former central bank governor Yi Gang says

China’s former central bank governor used the final two lectures of his five-year tenure to highlight the digital yuan, hailing it as being “at the forefront globally”.

Yi Gang, 65, was formally replaced by 60-year-old Pan Gongsheng as the head of the People’s Bank of China (PBOC) at the end of last month.

“The digital yuan focuses on retail payments, which enables the most significant improvements in efficiency, payment system redundancy and advancing inclusive finance,” Yi said at Tsinghua University in Beijing on July 5, according to a transcript of the closed-door lecture released on Thursday.

China’s digital currency, known as the e-CNY, could facilitate a wide range of domestic retail payments, including by foreign visitors, while it also has overseas use, added Yi.

The digital yuan, along with green finance initiatives, highlight Yi’s legacy as central bank governor, in addition to traditional tasks of helping the coronavirus-hit economy, preventing financial risks and controlling inflation.

Yi is now the president of the Chinese Society for Finance and Banking, while he is also a deputy director under a government advisory body, the Chinese People’s Political Consultative Conference.

With Pan now at the helm, the central bank pledged during its midyear work conference this week that it will continue pushing research and trials of the digital yuan, while also enhancing its financial infrastructure and services.

China was the one of the first major economies to study a central bank digital currency, with a research institute chartered under the PBOC in 2016 preceding moves by the European Central Bank and the US Federal Reserve.