As the People’s Bank of China advances the development of its digital currency, giving increasing prominence to digital payments, it has also committed to protecting financial inclusion.
Mu Changchun, Head of the Digital Currency Research Institute of the People's Bank of China (PBOC), says that central banks worldwide agree that people should have the right to choose how they pay, whether their preference is digital or physical.
Even when the digital renminbi is officially introduced to the public, the PBOC will continue to provide banknotes and coins. We will also facilitate the further development of an integrated, innovative and competitive market for retail payment solutions.
While cashless transactions are rising in China, the PBOC seems to recognise the importance of ensuring everyone—most especially those living in poor and remote villages—is considered in the design of digital currency, and the ongoing support of cash. It notes that any mandatory order forcing people to use digital payments would be ‘unfair’. One measure to address this will be the option of exchanging digital currency for cash at banks and through ATMs, with no fees charged.
This thinking is in step with the results of a recent survey by the European Central Bank, which showed most people in the eurozone not wanting a cashless society, and nearly 80 percent of point-of-sale transactions in the euro zone being conducted in cash.
To write off the role of banknotes and coins would be a mistake. The public’s commitment to cash remains strong and is getting stronger.