The 2023 China (Beijing) Digital Finance Forum, hosted by the Beijing Local Financial Supervision and Administration Bureau, the People’s Government of Fengtai District of Beijing, and the Digital Currency Research Institute of the People’s Bank of China, took place in Beijing on October 12. Zhou Xiaochuan, Vice Chairman of the Boao Forum for Asia and former Governor of the People’s Bank of China, delivered a keynote speech at the forum on the development prospects of central bank digital currency.
During his speech, Zhou Xiaochuan emphasized the importance of understanding and adhering to the two-tier operating system in the digital currency development ecosystem. He stated that the digitization of payment systems and currency are interconnected and that the system should allow diversity to coexist and compete to select the best. He also highlighted the need for a charging mechanism in the digital payment system to prevent cross-subsidization and cross-selling, which may lead to data misuse and other distortions.
Zhou Xiaochuan also shared his opinions on the development of digital currency, mentioning that the digitization of payment systems and currency are two sides of the same coin. He emphasized the need to advocate for the broad sense of digitization and cautioned against exclusive definitions of digital currency. He discussed the development of account-based digital currencies as the mainstream, while acknowledging the potential for token-based digital currencies. He also addressed the importance of infrastructure, such as the real-time full payment system and interoperability for cross-border transactions.
Lastly, Zhou Xiaochuan stressed the significance of the two-tier operating system, which involves the central bank as the first layer and commercial institutions as the second layer. He highlighted that the system should dynamically evolve, promote innovation through competition, and prioritize diversity and interoperability. He mentioned that the system should be upgraded periodically to enhance interoperability.
The speech by Zhou Xiaochuan at the China (Beijing) Digital Finance Forum shed light on the development prospects of central bank digital currency and emphasized the importance of the two-tier operating system and maintaining diversity in the digital finance ecosystem.