CBDCs was in the spotlight for a few months now. China recently tested its Digital Yuan payment system in Shenzen where citizens claimed approximately 30$ worth yuan and spent it across shops. A proper regulatory framework was a requirement for a CBDC. In fact, it is the primary reason for the delay of e-krona in Sweden.
The New framework in China aims at protecting its Digital Yuan.
The New framework is published as a draft by the Peoples Bank of China and it will be available for public consultation till November 23.
The New draft mainly addresses the legality of the digital Yuan.
The draft says that Yuan is the official currency of the Peoples Republic of China whether in Physical or Digital form.
It takes aim at a third party issued stable coins that are backed by Yuan. It prohibits the circulation and issuance of any currency that aims at replacing the Digital Yuan. The violators who transact in non-state-backed stable coins will be subjected to harsh punishments such as confiscating profits, huge fines, and potential criminal prosecution.