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What was the reason for China’s recent ban on digital currencies? The former head of the country’s central bank responds


Zhou Xiaochuan, the former head of China’s central bank, says the use of decentralized digital currencies in payments is not a good way for the traditional economic system, and that officials have replaced them with the national digital currency.

to the Report Youtudi, the former governor of the People’s Bank of China, spoke about the role of national digital currencies in the modern economy and shared his views on the main reasons for the ban on digital currencies in China.

Xiaochuan says other countries are using different methods to implement digital currencies in their economic systems, while China wants to find the best possible way.

He pointed out that the most basic capability of a currency is its use in payments, and if the currency does not have this capability, it will be inefficient in the current economic system. According to him, a currency can have the ability to store value and at the same time be used in payments.

According to Xiaochuan, when national digital currencies are introduced, the global economy will enjoy many benefits, such as lower costs, greater stability and convenience. These currencies are more convenient and have more flexibility than older payment methods. Businesses will also benefit from the digitalization of the economy, and small businesses can create simpler and more effective audit frameworks.

Referring to the ban on digital currencies and their extraction in China, the former central bank governor said it was a matter of “survival of the fittest” because he believed China’s blockchain-based decentralized digital currencies were not the most appropriate method of payment in the traditional economy.

In part, Xiaochuan referred to network congestion, slow transaction speeds and other scalability problems he says modern digital currencies face.

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