Yongli Wang: DCEP cannot replace cash soon, it is difficult to become a cross-border international payment and settlement system

Yongli Wang, former deputy governor of Bank of China, issued a statement expressing some views on DCEP, as follows:

1. DCEP can replace part of the cash, so it is helpful to reduce the cost of cash printing and circulation, improve operating efficiency, and strengthen supervision, but it is impossible to replace all cash quickly;
2. DCEP, as digital cash, may have a low proportion in the total amount of currency (currently, the proportion of cash in circulation in total currency is less than 4%. As a partial replacement of cash, DCEP will have a more limited scale). At least in the short term, it is impossible to reconstruct the traditional financial system;
3. DCEP will not be a completely borderless blockchain operating system without permission like Bitcoin, and it cannot be a cross-border international payment and settlement system soon;
4. Even if China is the first to launch a digital currency, whether China’s digital currency can become the global digital center currency depends entirely on whether China’s technology solutions used are leading and whether China’s international influence is leading the world;
5. In order to achieve the DCEP’s limited anonymity requirements, a transaction must simultaneously transmit information to the operating agency and the central bank, and the content of the transmitted information is different. This will be very complicated in design, and the cost may be higher than the current mobile payment of banks or payment institutions.