Proposals for the Legal Incorporation of Digital RMB in China

03/05/2023 10:29 • AI Insights • 86 views

It is reported that Fu Xiguo, a deputy to the National People’s Congress and president of the People’s Bank of China Shenyang Branch, proposed to submit a proposal to amend the Law of the People’s Republic of China on the People’s Bank of China at this year’s two sessions. Fu Xiguo believes that the management responsibilities of RMB should be improved, and the expression and production methods of legal RMB should be redefined in the legal provisions, giving digital RMB the same legal status as physical RMB; According to the characteristics of digital RMB, the issuance mode, circulation mode, supervision mode and other contents of digital RMB shall be comprehensively and in detail to prevent the risk of virtual currency and clarify the legal responsibility for making and selling digital tokens.

Fu Xiguo, deputy to the National People’s Congress: prevent the risk of virtual currency and clarify the legal responsibility for making and selling digital tokens

Analysis based on this information:

The People’s Bank of China Shenyang Branch President and Deputy to the National People’s Congress, Fu Xiguo, has proposed a proposal to amend the law of the People’s Republic of China on the People’s Bank of China at this year’s two sessions. The proposal aims to enhance the management responsibilities of RMB and redefine the methods of expression and production of legal Chinese currency. The amendment proposal intends to provide digital RMB with the same legal status as physical RMB, incorporating it into the legal provisions.

Fu Xiguo’s proposal highlights the significance of digital RMB as a digital currency and offers an opportunity to align its legal status with that of physical currency. The proposal addresses the main features of digital RMB such as the issuance mode, circulation mode, and supervision mode, among other parameters critical to this currency’s effective regulation’s comprehensive and detailed treatment. By doing so, the proposal aims to prevent the risk of virtual currency and clarify the legal responsibility for making and selling digital tokens.

Given the increasing interest in digital currencies globally, the suggestion of integrating digital RMB in legal provisions is a timely initiative. Digital currencies are inherently volatile, and investors are increasingly using them for speculative purposes, leading to multiple issues related to risk prevention. The incorporation of digital RMB into legal provisions is expected to mitigate such risks associated with using digital currencies as a tool for speculation.

The incorporation of digital RMB into legal provisions may also serve to bring more clarity and transparency to the financing and payment systems. This would help regulators monitor and control the circulation of digital currencies more effectively, which is essential for avoiding financial fraud and money laundering.

In conclusion, the proposal put forward by Fu Xiguo to incorporate digital RMB ad legal provisions in China comes as a timely and prudent initiative. It aims to balance risk and regulation, ensuring better monitoring and control of digital currencies’ circulation. It is an essential move towards protecting the Chinese financial sector and enhancing the country’s payment system.

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