Digital yuan isn’t a dollar replacement: Former central bank governor


BEIJING (CAIXIN GLOBAL) – China’s digital yuan is designed for retail transactions, not to replace the US dollar, former central bank Governor Zhou Xiaochuan told a forum over the weekend.

His remarks came amid heated discussion over whether the central bank’s digital yuan and its Cross-Border Interbank Payment System (CIPS) will enable Russia to bypass the impact of being cut off from Swift, the world’s biggest interbank payment messaging system, in the wake of its attack on Ukraine.

China started research on a digital yuan, also known as e-CNY, as far back as 2014 and launched the CIPS in 2015. Some analysts have argued that these developments represented efforts to pave the way for the yuan to replace the dollar as the world’s dominant reserve currency. The sanctions on Russia fuelled such debates.

Some analysts said that the crisis could offer China a chance to promote a yuan-centred global payment system, which could attract countries that want…

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