Yao Qian, formerly the director for the digital currency institute at the PBoC, denied that the digital yuan has ever been planned as a surveillance tool. According to reports, he clarified that China decided to develop the digital yuan as a countermeasure against increasingly popular “private payment platforms.”
Yao made these comments while on a panel at Beijing’s International Finance Forum.
His remarks argue against assertions made by United States Federal Reserve Chair Jerome Powell in a press conference on April 28. Powell indicated that such a digital currency would not work in the U.S., claiming that the digital yuan allowed the Chinese government to “see every payment that’s used—for which it is used in real-time.”
Yao insisted that this was not the case. arguing that a CBDC is necessary for the central banks to innovate fiat currencies amid the rise of digital ones.
The digital yuan has been the subject of much debate since its initial announcement. Many have questioned the effects it will have on industries, such as gambling operators in Macau.
Officials in the U.S. have also voiced concerns that it could undermine the dollar’s dominance. In April, reports revealed that the Biden administration was keeping an eye on the CBDC’s development. However, in May, Hester Peirce, Commissioner at the U.S. Securities and Exchange Commission (SEC), stated there digital yuan will not eclipse the dollar.