China will reportedly permit select banks to handle its central bank digital currency (CBDC).
That’s according to a report Friday (March 20) from Reuters, which notes that this effort marks a strong contrast to the U.S. stance on CBDCs.
The People’s Bank of China has chosen 12 new banks to promote the digital yuan, on top of 10 that are already authorized to do so, Reuters said, citing sources familiar with the matter.
According to the report, the push to integrate the digital yuan into China’s economy has been slow since the coin debuted in 2019. Most retail customers, Reuters added, can already make electronic transactions safely and at a low cost thanks to platforms like WeChat Pay and Alipay.
However, industry officials and analysts say there could be wider uses in the world of cross-border payments, where a CBDC could provide a way to settle trade outside of dollar-dominated systems, the report continued.
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The CBDC effort is happening in tandem with China’s crackdown on virtual currencies and a ban on stablecoins. The U.S., meanwhile, is moving in the opposite direction, with President Donald Trump championing cryptocurrencies and banning a digital dollar.
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“The U.S. banned CBDCs to leave room for private issuance. China on the other hand is wiping out space for private issuers,” Robin Zhang, chief operating officer of Winfield Global Capital in Singapore, told Reuters.
Meanwhile, PYMNTS wrote earlier this month about a new bill passed by the U.S. Senate that would block the Federal Reserve from issuing CBDCs until at least the end of 2030.
While the bill itself places limits on the number of homes that private equity firms and other large investors can own, it also contained an unrelated provision for the CBDC ban.
Digital asset and blockchain-based technologies advocacy group The Digital Chamber posted a statement from its chief executive Cody Carbone on X, saying that the group applauded the Senate’s passage of the bill with the anti-CBDC provision.
“Financial privacy is a cornerstone of American freedom, and any decision to authorize a Central Bank Digital Currency must remain with Congress and the American people,” Carbone said. “We appreciate the Senate reinforcing that digital innovation in the United States should be led by the private sector while protecting individual liberty.”
As covered here last year, lawmakers had tried to work a ban on CBDCs into the stablecoin-focused GENIUS Act. Those provisions were removed, but later linked to other legislation.
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