Binance CEO: China’s Lead in CBDC Development to Make Digital Yuan More Dominant Currency

Changpeng Zhao (CZ) has said that China’s central bank digital currency (CBDC) has a strong lead. As a result, other countries would be under pressure to design their own CBDCs. Binance CEO Changpeng Zhao, in an interview with Bloomberg on Nov. 13, offered his thoughts on the state of regulation, among other topics. His overall opinion was that the market is doing well in terms of regulation. However, he did note that 2020 has been a year of both good and bad developments. CZ said that adoption has been growing, because of the onboarding of major names like JPMorgan Chase. He said:

“Right now, we are definitely seeing more users come in, more adoption happening and more institutional participation.”

Specifically, CZ spoke of CBDCs, which have gained attention in recent months. Several central banks have begun research and development into CBDCs, most notably China. CZ said that the first CBDC will have a head start, with the chance to attract large international usage and volumes. This in turn, he expects, will put pressure on other countries to develop their own CBDCs.

China Leading the Pack

CZ noted that China is “way ahead” of other countries. He believes that this puts the digital yuan in a position to be a “more dominant currency” internationally. He stated:

“The first one to have a central bank digital currency working will be in a position to attract a lot of international usage, international volumes. This probably will help significantly in making RMB a more dominant currency in the world and if that works.”

The People’s Bank of China airdropped $1.5 million worth of the digital yuan to citizens of Luohu in Shenzhen. Citizens quickly spent the currency and the bank’s governor noted that over $300 million in transactions had taken place within a month. China is also moving towards other blockchain applications. The country’s second largest bank, the China Construction Bank, has issued $3 billion worth of bonds using blockchain-based tokens. President Xi Jinping stressed the desire to become a global leader in blockchain technology.

Other Governments are Doubling Down on CBDCs

Other countries have picked up their game, with France, Australia, and Japan also working on proof-of-concepts for digital currencies. Officials in the United States have also noted China’s head start, urging the US government to think about a dollar-based CBDC. PayPal, which made headlines for crypto support, has also said that it would work closely with banks to integrate CBDCs. The payments platform has nearly 350 million users and could facilitate widespread adoption. The service is currently only available in the US, but the firm plans to roll it out internationally in 2021.