- J McGlynn and M Bacina
China challenges G20 to charge on with CBDC co-operation
Last week, China’s President Xi Jinping urged G20 meeting attendees to support digital currency and advised that member countries should support the growth and implementation of their own central bank digital currencies (CBDCs) if they aim to stabilize and restore economic growth.
CBDC's: the way to build the digital economy to create a better future
President Xi made his opinion known in his wide ranging speech at the 15th G20 Leaders' Summit, which was designed to address the global economy in the wake of the COVID-19 pandemic. In an outline of the efforts he believes still need to be made in order to keep fighting the pandemic and to create a better future for all, Xi explained that countries must promote the sound development of the digital economy, including by way of embracing CBDCs.
While the president acknowledged that countries should be also be looking at: having a better response rates to pandemics, further development of artificial intelligence and ways of combating climate change, President Xi, emphasised that:
G20 needs to discuss developing standards and principles for central bank digital currencies with an open and accommodating attitude while pushing collectively for the development of the international monetary system.
Digital Yuan: China’s CBDC project
Though his high-level speech did not dive deeper into this individual issue, Xi's statement reflects China's resounding support for the integration and implementation of the CBDC. China has already successfully tested and distributed some of her CBDC. In fact, Digital Yuan has been used in over 4 million transactions that were worth well over $299 million.
Earlier this month, some analysts reported that a drop in bitcoin supply from Chinese miners was caused by the Chinese government's crackdown on local exchanges.
Unlike Australia, the Chinese government feels the case for a retail CBDC is strong as a means to stimulate the economy. When you consider recent predictions that China’s planned digital yuan will account for 15% of total consumption payments in 10 years, it's clear to see why the government would want to ensure stability in a new form of digital money.