After coming to power, the leader of the Chinese Communist Party Xi Jinping has been pushing for the development of the “digital renminbi.” Recently, Yao Qian, known as the “father of the digital renminbi” within the CCP, has fallen from grace, with the digital renminbi project being labeled as another failed endeavor.
The Chinese Communist Party Central Commission for Discipline Inspection reported on the 20th that Yao Qian, former director of the Science and Technology Regulatory Department of the China Securities Regulatory Commission and former director of the Information Center, was expelled from the party and removed from public office for using regulatory power to seek benefits for specific technology service providers. The report specified that Yao Qian abused his regulatory power, engaged in power-money transactions using virtual currencies, accepted illegal gains, with a particularly large amount involved.
Yao Qian joined the China Securities Regulatory Commission in June 1997, and held various positions within the institution. In 2014, when the People’s Bank of China began researching digital currencies, Yao Qian was part of the team that set up a statutory digital currency research group. He was known in the cryptocurrency community as one of the most knowledgeable individuals on digital currencies.
According to mainland China’s “Caijing” magazine in 2019, Yao Qian, as the director of the People’s Bank of China’s Digital Currency Institute, represented a country that did not allow Bitcoin, tasked with reconsidering Bitcoin’s role.
Following Yao Qian’s downfall, numerous netizens on overseas platforms mocked the situation, questioning his involvement in cryptocurrency investments and the government’s handling of the digital renminbi project.
The digital renminbi initiative, spearheaded by Xi Jinping, has been seen as a strategy to strengthen comprehensive financial control. However, critics argue that the project lacks practical use, with many believing it does not address the real needs of the people and is primarily driven by geopolitical ambitions.
The U.S. think tank Center for a New American Security (CNAS) stated in a report that the digital renminbi is a product of Xi Jinping’s geopolitical ambitions, aimed at positioning China as a global leader in financial technology to counter U.S. financial influence worldwide.
Former Inner Mongolia official now residing in Europe, Du Wen, expressed to Radio Free Asia that the digital renminbi policy implemented by the CCP aims to enhance comprehensive financial control internally. However, Yao Qian’s connection to the digital renminbi project led to his downfall as part of Xi Jinping’s anti-corruption efforts.
Data shows that by the end of 2017, under the approval of the State Council of China, the People’s Bank of China led a joint effort with major commercial banks and relevant institutions to develop the digital renminbi. By 2024, several banks in Hong Kong began offering digital renminbi wallet services to residents.
Despite the effort to promote the digital renminbi, the actual usage has been less than ideal. A report in September 2023 by China’s The Paper reflected on the limited adoption of the digital renminbi, citing concerns and doubts among the public about its usage.
In a recent analysis by the media channel “In the Wild” on November 21st, it was suggested that the digital renminbi project might end up as a failed endeavor for several reasons. One issue highlighted was the lack of market demand, as China’s existing mobile payment systems are already widespread and efficient.
Technical deficiencies were also cited as a major setback, with reports revealing that billions of RMB had been invested in the research and development phase of the digital renminbi, yet basic issues such as offline payments remain unsolved. Additionally, internal resistance within the financial system poses a significant challenge to the project’s success.
“In the Wild” further quoted financial experts who indicated that most of the officially introduced digital renminbi wallets are inactive, leading to a shift in the official narrative from the digital renminbi being a life-changing innovation to merely a supplementary system to existing payment methods. This shift in rhetoric has raised questions about the viability of the project.
Overall, the journey of the digital renminbi project has been marred by challenges and skepticism, raising concerns about its future success amid technical issues and internal resistance within the financial sector.