MNI: Digital Yuan Poses No Immediate USD Threat-BOJ Official

A fast-approaching digital yuan from the People's Bank of China would not immediately jolt the status of the U.S. dollar as the global reserve currency, a senior Bank of Japan official said.

China has conducted trials of a digital yuan and aims to begin issuance by the 2022 Winter Olympics in Beijing.

"The Chinese move is remarkable. Does it threaten the currency system of the industrialised nations? I don't think so," Kazushige Kamiyama, director-general of Payment and Settlements Department at the BOJ, told MNI.

China's growing share of global trade can help increase usage of cross-border yuan. But central bank foreign currency reserves of yuan, which is not fully convertible, remain small and will not likely increase rapidly, he said.

"From the viewpoint of the keeping of an asset and the reservation of value, a currency that limits fee transfer will not be used [globally]," Kamiyama said.

Some emerging countries have started to issue digital currencies to expand access to financial services and shore up confidence in their own currencies.

Wider use of the yuan, digital or not, is a growing topic of discussion in China, including through cross-border financial systems already in place and in Belt and Road projects, a space focused on emerging economies, see: MNI: Advisors Outline Next Steps In China Offshore Yuan Trade.