PBOC to ban yuan-pegged tokens

The Chinese financial regulator has put amendments to the Law on the People’s Bank of China up for public discussion. They envisage the legalisation of the digital yuan and prohibit the issuance of tokens pegged to it.

Excerpts from the draft bill were provided by journalist Colin Wu. He said this could mark the first instance of digital currencies appearing in China’s formal laws.

This may be the first time that cryptocurrency has appeared in China’s formal laws.

— Colin Wu（WuBlockchain） (@WuBlockchain) October 23, 2020

Wu said the document prohibits legal and natural persons from issuing and trading tokens to replace the digital yuan in circulation.

Breaking: The People’s Bank of China issued a draft of legal comments, clearly stipulating that no unit or individual may produce and sell tokens, coupons and digital tokens to replace CNY in circulation in the market. pic.twitter.com/rH7i4w4mJO

— Colin Wu（WuBlockchain） (@WuBlockchain) October 23, 2020

The regulator proposes to punish offenders with a fine equivalent to five times the proceeds, cessation of operations, and confiscation of profits from issuing and selling yuan-backed digital tokens.

Also, one of the amendments proposes to legalise the national currency in digital form.

Earlier, the regulator called upon to accelerate the pace of research and development of the central bank digital currency (CBDC), and to ensure that it is controllable and safe.

Earlier, Chinese authorities had hoped to be the first to issue a CBDC. In their view, winning the race would bolster the yuan’s position in the global market, breaking the dollar’s dominance.

Follow ForkLog’s updates on Facebook!