The former head of China’s central bank digital currency (CBDC) research project, Yao Qian, has been expelled from the Chinese Communist Party and removed from his government position, following allegations of corruption.
According to reports in state-owned local media, Qian is accused of having abused “the right to recommend, formulate, and execute policies” and “abandoned the responsibilities of science and technology supervision” following a disciplinary review.
In particular, he is accused of “sparing no effort to support specific technology service providers for personal gain,” though details about these conflicts of interest are not mentioned.
The report alleges that he accepted cryptocurrency, property, premium liquor, and dinners, and illegally borrowed money while in his position.
The exact scale of the bribes, or specific transactions, was not disclosed in the report, other than it was “very huge.”
Yao Qian's case has been referred to local authorities for prosecution. The executive had been under investigation since April 2024, according to local reports.
Key Takeaways
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Yao Qian, former head of China’s CBDC project, faces serious corruption charges.
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He has been expelled from the Communist Party and removed from his government role.
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Allegations include accepting bribes in cryptocurrency and other forms.
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Qian's case is part of a broader crackdown on corruption within the Chinese government.
Who Is Yao Qian?
Qian became the first head of the Digital Currency Research Institute at the People's Bank of China (PBOC) in 2017, where he worked on developing the Digital Yuan. Qian left China’s Central Bank in 2018 and has been serving at the China Securities Regulatory Commission since then.
Qian had been outspoken in the past when it came to expressing his personal opinions about CBDCs, suggesting that they could one day run on Ethereum (ETH) and incorporate smart contract functionality at the International Financial Forum (IFF) held in Beijing in 2021.
China’s Digital Yuan
The news comes as China’s own digital yuan CBDC, which first started limited testing in 2019, attracts more real-world use cases.
Lu Lei, a deputy governor at China’s central bank, told media in September that almost $982 billion in transactions had been carried out using China’s digital yuan by the end of June 2024.
The digital yuan, which is undergoing a gradual rollout, is also now being used in jurisdictions outside mainland China.
Hong Kong now allows the CBDC to be used for payments in the city’s retailers, using a mobile wallet, according to Reuters.
The CBDC has also begun public use for cross-border payments.
In November 2023, it was reported that the digital yuan was used to settle a cross-border crude oil transaction for the first time, in an international trade involving Petro China.
Implications of the Investigation
Yao Qian’s investigation raises significant concerns about the integrity of China’s digital currency initiatives.
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Corruption in Digital Finance: The allegations against Qian highlight potential vulnerabilities in the governance of digital currencies, particularly regarding the misuse of power and influence.
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Impact on CBDC Development: As China continues to lead in CBDC development, this scandal could affect public trust and the future trajectory of the digital yuan.
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Global Repercussions: Given that many countries are observing China’s CBDC efforts, this incident may influence how other nations approach their own digital currency projects.
Yao Qian’s case serves as a reminder of the challenges that accompany the rapid advancement of digital finance, particularly in a tightly controlled political environment like China’s.
As the investigation unfolds, the implications for both domestic and international perceptions of China’s digital currency ambitions will be closely monitored.