Digital currencies can substitute cash in circulation, Ex-Chinese central bank exec

Wang Yongli, former vice president of China’s central bank, has endorsed central bank digital currencies (CBDC) as a viable substitute for cash in circulation. According to a Global Times report, Yongli said that though cryptocurrencies can be a substitute for fiat, they shouldn’t be confined to just that. 

Yongli believes that digital assets can reshape monetary structures. For instance, “basic accounts” for all social entities can be set up on a central bank’s digital currency platform. This will let the bank oversee cryptocurrency transactions without much impact on the present financial system.  

The former executive added that cryptocurrencies improve monetary policy effectiveness as it will reduce the excessive issuance of paper money. Yongli’s words come at a time when countries around the world are increasingly considering launching their own CBDCs.