China\u2019s proposed digital currency could trigger global use of the yuan, according to the CEO of American cryptocurrency financial services firm Circle.<\/p>\n\n\n\n
The People\u2019s Bank of China (PBOC)<\/a> last month announced that it\u2019s close to launching its own digital currency<\/a>, saying that the rationale behind the move is to \u201cprotect\u201d its foreign exchange sovereignty.<\/p>\n\n\n\n This becomes a mechanism by which (the yuan) can be used in everyday transactions all around the world.<\/p>\n\n\n\n Jeremy Allaire<\/p>\n\n\n\n CEO OF CIRCLE<\/p>\n\n\n\n China\u2019s central bank plans to launch its digital token through a two-tier system, under which both the PBOC and commercial banks would be legitimate issuers.<\/p>\n\n\n\n \u201cI look at this really meeting several goals. But, I think the bigger opportunity here is this is a way for the Chinese yuan to be distributed globally,\u201d Circle CEO Jeremy Allaire told CNBC\u2019s \u201cSquawk Box\u201d on Wednesday.<\/p>\n\n\n\n \u201cThis becomes a mechanism by which (the yuan) can be used in everyday transactions all around the world,\u201d added Allaire, an internet entrepreneur who also founded video streaming firm Brightcove. \u201cIt\u2019s ultimately a foundation for the internationalization\u201d of the yuan.<\/p>\n\n\n\n Beijing has in recent years pushed hard to get more international entities to use the yuan outside China.<\/p>\n\n\n\n The U.S. dollar is currently the world\u2019s \u201creserve currency<\/a>\u201d \u2014 about 58 percent of all foreign exchange reserves in the world are in U.S. dollars<\/a>, according to the IMF, and about 40 percent of the world\u2019s debt is denominated in dollars.<\/p>\n\n\n\n Mu Changchun, deputy director of the PBOC\u2019s payments department, said that the new digital currency will have similarities to Facebook\u2019s proposed Libra coin<\/a>. It would be as safe as central-bank issued paper notes, he claimed, and could be used on platforms such as Tencent\u2019s<\/a> WeChat and even without an internet connection.<\/p>\n\n\n\n