A former vice president of a top Chinese bank said digital currency should replace fiat in the nation’s financial systems.

  • Yongli Wang, previously of the Bank of China, said in a WeChat post that wide use of digital currencies would encourage monetary reform, as reported by media outlet The Global Times on Sunday.
  • Wang, now a director of the Haixia Blockchain Research Institute, also said China would use digital currency as a substitute for cash in circulation initially, but that could impact its market competitiveness if confined solely to that role.
  • Digital currencies, he said, could help to bolster liquidity in an economy, while placing limits on excessive issuance of physical cash.
  • Wang added that preventing the printing of too much cash would help maintain monetary and financial stability.
  • One way forward, he suggested, would be to provide exclusive "basic accounts" on the central bank's digital currency platform for all social entities, according to the report.
  • Bank of China is one of the nation's four biggest state-owned commercial banks.
  • The former VP's comments come at a time when China's biggest banks and other commercial entities have begun trialing the pilot of the central bank's Digital Currency Electronic Payment (DC/EP) system.
  • The digital currency, often dubbed the digital yuan, is designed to facilitate the replacement of all the nation's cash in circulation in the coming decade.

See also: China to Test Digital Yuan on Tencent-Backed Food Delivery Platform

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.