China is in the process of introducing a digital version of its yuan currency. Photo: iStock

Beijing should speed up its rollout of the digital yuan and make it a key part of China’s “independent” financial infrastructure in the digital era, said a top People’s Bank of China (PBoC) official.

The comments by Chen Yulu, deputy governor of the PBoC, came months after the country’s top leadership introduced a new inward-facing economic strategy – dual circulation – to support future growth by relying more on domestic demand, and to better insulate itself amid rising geopolitical tensions, particularly with the United States, the South China Morning Post reports.

The comments also came as other major central banks have made inroads on the development of their own sovereign digital currencies.

“We must serve dual circulation with fintech-led innovations,” Chen said in an article published on Sunday in China Finance magazine, which is run by the PBoC. “We must build an independent and high-quality financial infrastructure … quicken the pace of research and development of the central bank digital currency, and ensure that pilot tests show [the digital currency] is controllable and safeguards the security of payments.”

Japanese CBDCs

Meanwhile, Japan will have to revise a law stipulating the Bank of Japan’s mandate and responsibilities before it can issue central bank digital currencies (CBDCs), a senior ruling party official said on Monday, according to a Reuters report.

Any revision to the BOJ law would be a good opportunity to consider making other changes such as adding job creation to the central bank’s mandate, said Kozo Yamamoto, head of the Liberal Democratic Party’s council on financial affairs.

“Like the US Federal Reserve, the BOJ should set job creation and inflation as its mandate … The new law should also clarify that 2% inflation is the BOJ’s policy target,” he told Reuters.