PBoC seeks to revise banking law to legalize digital yuan and ban yuan-pegged tokens

Quick Take

  • The People’s Bank of China is seeking public feedback to revise current central banking law
  • The revision draft proposes to legalize digital yuan
  • It also seeks to prohibit circulation of yuan-pegged digital tokens

The People's Bank of China (PBoC) is seeking public feedback to revise the current central banking law, which aims to legalize digital yuan but prohibit circulation of yuan-pegged digital tokens.

The central bank published a notice late Friday China time that it is accepting public feedback for a revision draft until November 23. In Article 19 under Section 3, the draft revision proposes to include the wording that "Renminbi includes both a physical form and a digital form."

The proposed revision appears to be paving a legal path for a wider rollout of China's long-anticipated central bank digital yuan initiative.

In addition, Article 22 under Section 3 in the revision draft also states that "any individual or entity shall not make or issue any tokenized note or digital tokens that replace Renminbi's circulation in the market."

"For anyone that violates such regulation, the PBoC will halt such activities and forfeit any proceed from the making and selling of yuan-backed digital tokens and issue a fine that is up to five times of the involved proceeds," the proposed revision states. 

The current edition of China's central banking law has been effective since 2003, which outlines the role of the PBoC in issuing sovereign fiat currency as well as drafting and executing monetary polices to maintain financial stability. 

The proposed revision comes amid the PBoC is expanding the trial of China's digital yuan in major domestic cities. The Block recently reported that the central bank has been authorized with 15 patent applications for the central bank digital currency that shed lights on the system's financial surveillance capability. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Trending Stories

Get Your Crypto
Daily Brief

Delivered daily, straight to your inbox.

Will Sanctions Drive Russia into the Arms of Cryptocurrencies?

From the removal of many Russian banks from SWIFT to a seemingly constant flow of new sanctions, Russia’s invasion of Ukraine has left many to wonder: Is the country likely to lurch towards cryptocurrencies? And if so, what does this mean for businesses that are holding and/or using crypto? Crypto and sanctions evasion Although crypto […]
Read Full Story
Sponsored Post

Layer-2 Scaling Solutions: A Framework for Comparison - Commissioned by Polygon

Ethereum had a breakout year in 2021. It’s native asset, ETH’s, market capitalization surpassed $500 billion for the first time. Its network facilitated upwards of $7 trillion value transfer. Non-fungible tokens (NFTs) emerged as another “killer application” that have put its technology on the global stage and caught the attention of the masses.
Read Full Story
May 5, 2022, 3:17PM UTC