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Proposed Chinese Law Outlaws All Yuan-Pegged Tokens – Except for Its CBDC
The new version will essentially also clear the way for the digital yuan to be the one and only official yuan-pegged token in mainland China.
By David Pan
Updated Sep 14, 2021, 10:23 a.m. Published Oct 23, 2020, 2:36 p.m.
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China’s central bank has included the digital yuan in the latest version of a proposed banking law, giving more legal clarity to the regulation of its national virtual currency.
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The People’s Bank of China is soliciting public comments for the draft of Laws of People’s Republic of China on PBOC until Nov. 23, according to its statement on Friday.
The proposed law recognizes the renminbi in both physical and digital form. The new version will essentially also clear the way for the digital yuan to be the one and only official yuan-pegged token in mainland China.
“To prevent risks associated with virtual currency, any other legal entity or individuals can not issue or sell tokens to replace the circulation of Renminbi.,” according to article 22, section 3 in the document.
Read more: First Users Not Impressed by China’s Digital Yuan: Report
The revision would take a toll on one of the biggest crypto-related businesses in China since many Chinese investors conduct crypto-to-crypto trading with stablecoins. Tether, one of the largest crypto companies, has a yuan stablecoin.
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- Crypto firms conducting payments with stablecoins, which are legally classified as electronic money tokens (EMTs), must hold a PI or electronic money institution (EMI) authorization.
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