China’s CBDC Mastermind Is Under Investigation

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As an observer with a background in finance and technology, I find the ongoing investigation into Yao Qian, the Director of the Information Center at the China Securities Regulatory Commission and former head of the central bank’s digital currency research institute, particularly intriguing. His work on China’s Central Bank Digital Currency (CBDC) has placed him under the watchful eyes of the Chinese government, adding to ongoing probes on some key players in the crypto community.

As a researcher studying the development of Central Bank Digital Currencies (CBDCs), I’ve been closely following the work of Yao Qian, the mastermind behind China’s CBDC project. However, recent reports have cast a shadow over his efforts as it appears he is now under investigation by the Chinese government. This news comes on the heels of ongoing investigations into other key figures in the crypto community, leading to growing apprehensions regarding the potential adoption of CBDCs in China.

Charges against Yao Qian 

Based on recent reports, the Chinese anti-corruption agency has levelled accusations against Yao Qian for allegedly breaking laws and regulations. However, specifics about the ongoing investigation are yet to be disclosed. Born in 1970, Qian previously held the position of director at the digital currency research institute of the People’s Bank of China, and currently heads the Information Center of the China Securities Regulatory Commission.

In 2017, Qian was named the inaugural leader of the digital currency research institute at the People’s Bank of China. The following year, he transitioned from this role to join the securities regulatory body. A strong advocate for blockchain technology, Qian authored a book in 2022 that explored topics including NFTs, DeFi, DAOs, and Play-to-Earn.

The Director confidently asserted that Web 3.0 will significantly impact China’s internet structure in the future. Consequently, he recommended increased focus and investigation into its advancement.

I, as an analyst, would rephrase Qian’s criticism as follows: I noted Qian’s concern over the restrictions within the Web 2.0 environment. He stressed that while users are encouraged to engage in social interactions or online activities by major tech companies, their access can be taken away at any time.

Qian is a proponent of China’s digital currency, the digital yuan. Three years ago, there were allegations that the Chinese government intended to use this digital currency as a surveillance tool. In response, Qian explained that the digital coin was developed to challenge privately-owned payment systems like Alipay. He further emphasized that central banks have a responsibility to issue legal tender in the form of fiat currency given the increasing digitization within the economy.

For several years now, China has been diligently working on creating and implementing its Central Bank Digital Currency (CBDC). Like other nations pursuing digital currencies, China has carried out numerous trials of its CBDC across various regions of the country.

In the year 2021, the government imposed a restriction on its citizens, preventing them from participating in crypto-related transactions such as trading and mining of cryptocurrencies within the country. Concurrently, news emerged that the Chinese administration initiated approximately 200 CBDC (Central Bank Digital Currency) projects throughout the nation last year. The report underscores growing interest in digital currency among the Chinese populace, mentioning that certain local administrations employed the digital yuan as incentives to boost business revitalization.

Stablecoins as a Proposed Alternative to Chinese CBDC

As a CBDC (Central Bank Digital Currency) analyst, I would encourage the relevant authorities to seriously consider the implementation of yuan-backed stablecoins as an alternative solution in response to China’s ongoing developments and tests within this sector. Jeremy Allaire, CEO of Circle Financial, has made a strong argument for this approach.

As a financial analyst, I can suggest that Allaire posits that stablecoins present significant advantages for China’s international trade and commercial dealings. He emphasizes that if the Chinese government aspires to expand the global reach of the yuan, stablecoins could pave the way towards this objective.

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2024-04-26 14:00