The People's Bank of China (PBOC) wants to pass amendments to the current central bank law, which provides for the legalization of the digital yuan but prohibits the circulation of stablecoins pegged to the national currency.
On October 23, the CB issued a notice to accept public comment on the revision of the law. The NBK proposes to include in the rule a provision stating that “the yuan is in circulation in both physical and digital form”, and “any individual or legal entity may not issue any tokenized banknotes or digital tokens that replace the circulation of the yuan with the market".
“The NBK will cease operations and confiscate any income from anyone who violates such regulation, as well as impose a fine that is five times the corresponding income,” the proposed bill says.
The Central Bank may issue the digital yuan earlier than formerly thought. The head of the NBK Yi Gang made a call to shorten the development and implementation of the digital currency this week. In a recent interview, Binance CEO Changpeng Zhao said the exchange has no plans to issue a yuan-pegged stablecoin due to "China has adopted too many restrictions on the capital flight".