On November 27th, the Hong Kong Monetary Authority - International Settlement Bank high-level meeting welcome dinner was held in Hong Kong. Former Governor of the People's Bank of China, Zhou Xiaochuan, gave a keynote speech on the development of China's digital currency.
Zhou Xiaochuan stated that the digitization of payment systems and currency are two sides of the same coin. He observed that about 90% of retail transactions on the mainland have already been digitized and no longer use traditional paper currency or traditional transaction methods. He also stated that the remaining 10% of the work mainly involves strengthening interoperability and developing higher standards and rules for security, encryption, and privacy protection.
Zhou Xiaochuan also mentioned the dual operating system of China's digital currency, in which the central bank is the first layer, and commercial banks, telecommunications operators, and third-party payment network platform companies are the second layer. He stated that this system is a system that improves service levels and promotes innovation through competition. Under this system, digital currency values the centralized management of the central bank, which can improve the efficiency of the payment system, break down barriers to retail payments, and promote interconnectivity between different payment products.
Zhou Xiaochuan stated that security is a key issue that needs to be addressed in the development of digital currency. The mainland will strengthen supervision of security, privacy protection, and interoperability issues in digital payments.
