China’s digital yuan will return to the spotlight
China’s central bank digital currency was once one of the industry’s hottest topics, but 2024 saw a relatively quieter year for the digital yuan.
Still, Winston Ma, an adjunct law professor at New York University and former managing director at China’s sovereign wealth fund, predicts a strong push for the digital yuan’s overseas expansion in 2025.
China expanded the digital yuan to Hong Kong’s retail sector in 2024, but its efforts were slower and less aggressive than in previous years. This slowdown coincided with the investigation of Yao Qian, the first director of the People’s Bank of China’s Digital Currency Institute.
Yao, credited with spearheading the digital yuan’s early development, was investigated in April 2024 for “violations of discipline and law.” In November, he was removed from office for allegedly accepting cryptocurrency bribes. While Yao no longer led the project at the time of his dismissal, the scandal raised concerns about the digital yuan’s integrity.
Despite these setbacks, China remains committed to its digital finance ambitions. At the third plenum, which is China’s most authoritative meeting with President Xi Jin Ping in attendance, the Central Committee of the Communist Party of China announced plans for a renewed focus on the internationalization of its currency, including advancing the digital yuan.
A snippet of China’s plenary session vows to crack down on illegal financial activities. (Xinhua)
Then in November, Shanghai, China’s financial hub and most populous city, unveiled plans to boost digital finance, including improving digital yuan acceptance.
Ma said that the digital yuan expansion could be met with resistance from the US.
“[This] may be a year where China’s CBDC overseas expansion efforts, especially with the BRICS countries, would meet with challenges from [Donald Trump], as…
..
