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

China’s approach to implementing its digital currency will favor its domestic retail system and prevent the dollarization of the economy, according to a former senior official.

Zhou Xiaochuan, the president of the Chinese Finance Association and former governor of the People’s Bank of China (PBoC), told Eurasia Forum e-conference attendees on October 27 that the central bank’s focus in creating a digital currency greatly differed from that of the countries in the Group of Seven – Canada, France, Germany, Italy, Japan, the UK, and the US, Cointelegraph reports

Xiaochuan said the G7 was chiefly concerned with “the challenges raised by Libra, bitcoin, and similar digital encrypted currencies,” while the PBoC was focusing on using its digital currency for retail payments domestically and preventing the US dollar from becoming a more widely used medium of exchange in China.

“In China, we’ve [been working] very hard to push the DCEP – that’s the digital currency – and the electronic payment,” said Xiaochuan. ”However, the focus and the major point of our concept and the content are different from the G7 principle. We [need] to prevent dollarization. This is one of the major designing points of the Chinese DCEP.”

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