On Friday, state media claimed that a Chinese foreign exchange regulator official stated that “programmable features” of a central bank digital currency (CBDC) may improve monetary policy instruments.
Although adoption is still early, China is one of several countries exploring CBDCs, central bank-issued digital tokens.
CBDCs are typically considered M0 money or cash in circulation.
On Thursday, SAFE deputy administrator Lu Lei told a seminar that central banks may establish CBDCs M2 currency, which comprises deposits and savings, based on its programmable capabilities, Shanghai Securities News reported.
Programmable CBDC parameters can be modified. Money might be designed to expire or be limited.
Lu said the People’s Bank of China (PBOC) would investigate CBDC rate adjustments to regulate the macroeconomy.
Lu said that CBDC-based cross-border payments are safe, convenient, and inclusive.
Last year, Chinese state-owned banks participated in a Bank of International Settlements cross-border transaction experiment.
At the end of June, e-CNY transactions totaled 1.8 trillion yuan ($249.33 billion). Only 0.16% of China’s M0 money supply was e-CNY.