In Brief:
- China is planning on setting up a Digital Asset Exchange in Beijing.
- The initiative is to promote usage of the digital Yuan and counter other cryptocurrencies like Bitcoin.
- A broader roll-out of the digital currency is expected to be in February 2022.
China is considering establishing a Digital Asset exchange (bourse) in Beijing as part of its Virtual Yuan Push. This step will act as officials push to encourage usage of the digital yuan while cracking down on cryptocurrencies.
According to guidelines issued by the State Council, Beijing is looking for a way to set up a bourse for digital assets trading, in order to boost financial services in the capital.
The cabinet requested faster trials of the digital yuan and addressed big banks to set up e-CNY operation firms. There was no other detail in the statement on the anticipated digital asset exchange.
Since 2014, China has been working on developing a virtual version of its legal tender in order to counteract an increasingly digitized economy and potential challenges from virtual currencies like bitcoin.
It banned crypto exchanges back in 2017 and also imposed a ban this year over a concern that such crypto activities are disrupting their progress. There are several instances when China has banned overseas crypto exchanges from providing their services such as trading, buying, and selling on the mainland.
Last year, China began trials in a number of cities to promote the usage of the e-CNY among consumers and investors, though the response was lukewarm at first. When Beijing holds the Winter Olympics in February, a further roll-out of the digital currency is envisaged.
