PBOC Researcher: Can Cryptocurrency & Central Banks Coexist?

Yao Qian works in the technology department of People’s Bank of China, the country’s central bank and financial market regulator.

In this feature article, Qian discusses the relationship between digital currencies and bank accounts, proposing a design concept where bank accounts and digital currency wallets coexist.

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While technological direction, risk control and security measures are all important, the effectiveness of digital currency ultimately relies on its successful application.

For a digital fiat currency (DFC) to show vitality and supplement or even replace traditional currency, it has to be user friendly and well received by the public. Currently, the issuance of fiat currency in China follows the ‘central bank-commercial bank’ system, and most of the social and economic activities are based on the commercial bank account system.

Therefore, if digital currency can leverage existing IT infrastructure with a variety of applications and services, the costs of promoting digital currency would be significantly reduced and its use would be more convenient and flexible, facilitating the wide adoption of digital currency by the public.

In addition, the incorporation of digital currency into existing applications would generate more diversified scenarios, which would contribute to greater competitiveness of digital currency, providing better services.

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