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China to Open Financial Sector, May Release a Cryptocurrency

10 March 2018

The objective of Beijing to use the national currency in worldwide financial transactions and investment. In a January 2018 op-ed, the bank's vice governor had pitched the concept of a centralized digital currency with properties that would allow the PBoC to verify transaction data.

He also pointed out that the opening up of the financial sector includes not only widening market access for foreign investors, but also the global expansion of China's domestic financial institutions and promotion of global use of yuan.

Asked whether China will build a similar regime to the "twin peaks" model in the United Kingdom, which divides financial oversight between one watchdog for business and another for consumer protection, Zhou suggested it was unlikely to happen soon.

And on Friday, deputy governor Yi Gang indicated the shareholding restrictions could be loosened or done away with altogether.

"The emphasis should be to serve the real economy", he remarked, adding that any new digital currency should also "not conflict with the current financial order".

"We don't want to create products for speculation ... the illusion of getting rich overnight is not a good thing".

Despite some speculation to the contrary, Zhou didn't formally unveil any kind of digital currency product - rather, he outlined what it may look like, suggesting that distributed ledger tech could underpin a future release.

Xiaochuan said that the central bank has set up a digital currency research centre, stating that technological developments should be maintained as long as they serve the economy.

The 70-year-old Zhou is expected to step down from his post this spring, after leading China's central bank for 15 years.

China to Open Financial Sector, May Release a Cryptocurrency