The People’s Bank of China (NBK) has proposed amendments to the law on the Central Bank of China, implying a ban on the issuance of tokens tied to the Chinese yuan.
According to the proposal of the NBK, China’s state cryptocurrency called Renminbi (RMB) should be legalized in material and digital form. However, no natural or legal person should issue any tokenized assets or digital currencies to replace the digital renminbi in the market. For violation of the law, all proceeds received from the sale of digital yuan-backed tokens are confiscated. In addition, issuers of these tokens will be obliged to cease their activities and pay a fine five times higher than the amount of income received.
The current version of the law on the Central Bank of the PRC 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 a regulatory framework before the large-scale launch of the digital renminbi. The regulator is ready to discuss this initiative with all interested parties and accepts comments until November 23, 2020.
Earlier, Yifei Fan, deputy governor of the People’s Bank of China (NBK), said that the digital yuan would be equivalent to the usual yuan and would be governed by the same laws that apply to fiat currency. In addition, a few days ago, the NBK leadership announced the need to speed up the launch of the state digital currency, since companies and citizens of the country need it, especially during the pandemic.