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Zhou Xiaochuan, the former Chairman of the People’s Bank of China has told reporters the digital Yuan would involve a multi-step process.

He outlined these three areas where a digital coin could be used:

  • The DCEP will be used for electronic payments for retail markets among everyday consumers. This will likely take up a large portion of its function: day-to-day transactions.
  • International remittances will be another area where the digital Yuan will prove instrumental. It will allow for easier inter-bank settlement. Payment ramps will be introduced.
  • The digital Yuan will also help to maintain national sovereignty. Being a monetary economist, Xiaochuan does believe the Yuan should have competition within China.

(Reported by Dovey Wan)

There is still no real confirmed date for the digital currency and markets are waiting for this with intent. The Chinese government has been taking steps recently to legitimize the blockchain industry by getting strick on companies who have offered coins. Bitcoin has been flying around on this news and took a dive recently as the Chinese authorities became more strict.

A legit government digital coin would take lots of demand away from Bitcoin as the people may be forced to use it over the digital gold (BTC).