The People’s Bank of China (PBOC) has proposed amendments to the law on the Central Bank of the People’s Republic of China, implying a ban on the issuance of tokens tied to the Chinese yuan.
According to the NBK’s proposal, China’s state-owned cryptocurrency, called Renminbi (RMB), should be legalized in physical and digital form. However, no individual or entity should issue any tokenized assets or digital currencies to replace the digital yuan in the market. For violation of the law, the confiscation of all proceeds received from the sale of digital yuan-backed tokens is provided. In addition, the issuers of these tokens will be required to cease their activities and pay a fine five times the amount of the received income.
The current version of the Law on the Central Bank of the People’s Republic of China has been in force since 2003. According to this law, the NBK issues the national fiat currency, as well as determines and implements monetary policy to ensure the financial stability of the country. The initiative of the Chinese central bank is aimed at preparing the regulatory framework before the large-scale launch of the digital yuan. The regulator is ready to discuss this initiative with all interested parties and accepts comments until November 23, 2020.
Earlier, the deputy governor of the People’s Bank of China (PBOC), Yifei Fan, said that the digital yuan would be equivalent to the ordinary yuan and would be regulated by the same laws that apply to the fiat currency. In addition, a few days ago, the leadership of the NBK announced the need to accelerate the launch of the state digital currency, as companies and citizens of the country need it, especially during the pandemic.