China promotes global digital fiat currency standardization

China is promoting standards for digital fiat currency around the globe based on its leading research, according to central bank officials.

"The country is participating in the development of some basic digital fiat currency concepts and standards in some international standard-setting bodies," said Li Wei, director of the People's Bank of China's technology department. "China has already introduced standards in some economies involved in the Belt and Road Initiative."

The concepts and standards are usually related to digital fiat currency definitions and categories, issues affecting both traditional and virtual currencies, and regulation.

Global central bank governors and international financial supervision organizations have discussed topics related to digital currencies, including specifying the attributes, legitimacy, security and regulatory processes relating to the emerging technology.

"But we also face difficulties, as the standards are not so easily accepted among some countries," said Li.

"We have already achieved some results so far," said Chen Jianxin, deputy head of the PBOC's Currency, Gold and Silver Bureau. "China is one of the countries that are leading the research in digital currencies, and we hope the standards that we have proposed will be accepted by the international community."

To date, China has introduced 72 experts to the International Organization for Standardization, joining 24 working groups teams to develop international standards in various areas, according to the PBOC.

The PBOC is one of the first central banks to explore, study and experiment in digital currencies. It launched a specialized research institution in 2016.

The central bank started to research digital currencies and electronic payments in partnership with some companies back in 2017.

Under the G-20 framework, a consensus was achieved in March among financial ministers and central bank governors that crypto-assets have the potential to improve the efficiency and inclusiveness of the financial system, and the broader economy.

But they agreed it can also raise issues with respect to consumer and investor protection, market integrity, tax evasion, money laundering and terrorist financing.

The officials also committed to implement the Financial Action Task Force, an intergovernmental body setting standards and promoting effective implementation in the international financial system.

They called on international standard-setting bodies to continue their monitoring of crypto-assets and risks, according to their mandates, and assess multilateral responses as needed.