The Governor of the People’s Bank of China, Yi Gang, has moved to dampen down expectations regarding the country’s launch of a digital currency. In a press conference yesterday, he refuted recent rumors of an imminent launch for the 'Libra-style' cryptocurrency, and even questioned whether the plan would rely on blockchain technology at all. 

Yi’s time in front of journalists, where he sat alongside the Chinese Finance Minister and Bureau of Statistics head, was largely focused on addressing the Chinese policy towards fiscal stimuli.

This centered around announcing a muted response from the Government and PBoC to the massive amounts of cash being injected into the economies of Europe and the US under the auspices of Quantitive Easing, a policy that has raised eyebrows among the macro-economically minded sector of the crypto community in recent days. 

However, he also took time to respond to queries regarding the PBoC digital currency plans, which have been under development since 2014. Echoing other recent statements saying predictions of an imminent launch for a Chinese cryptocurrency were off the mark, he told reporters that there was no timetable in place for a roll out at present, and that – as there as there is also no formal roadmap for the development of the technology that would underpin China’s digital cash – blockchain-based technology was only one of a range of options on the table for underpinning the system. 

Also of upmost importance, he said, was the the regulatory frameworks for anti-money laundering, tax avoidance and terrorist financing were in place, especially if the digital currency was to serve as a method for cross-border payments. Yi also clarified that the system was intended to directly replace part of the so-called ‘Narrow Money’ supply, or M0.

That definition refers to the cash and coins in circulation – which is distributed by central banks such as the PBoC and is its responsibility – as compared to other elements of the wider money supply, such as money in bank accounts and issued as credit, which is the domain of commercial banks under a fractional reserve system.  

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