Ex-Head of China’s Digital Yuan Project Facing Probed

• Yao Qian is reportedly under investigation by Chinese authorities for legal violations.
• Qian led research efforts to develop and issue a digital Yuan.
• The outcome of Qian’s investigation remains uncertain.

Shanghai Securities News reported on Friday that Yao Qian, the brain behind China’s Central Bank digital currency (CBDC) project, is reportedly under investigation by the Chinese authorities for an alleged “discipline and law” breach.

Per the statement, “Yao Qian, Director of the Science and Technology Supervision Department and Director of the Information Center of the China Securities Regulatory Commission, is suspected of serious violations of discipline and law and is currently under investigation by the Central Committee.”

Further details revealed that the disciplinary review is conducted by the Discipline Inspection and Supervision Team of the State Commission for Discipline Inspection within the China Securities Regulatory Commission. Moreover, the Supervisory Committee of Shanwei City in Guangdong Province oversees the investigation.

Qian, a prominent figure in the blockchain space, led research efforts at the People’s Bank of China (PBOC) to develop and issue a digital Yuan. The realization of this project prompted other countries worldwide to explore CBDCs. 

In May 2021, the former head of CBDC research at PBoC predicted that state-backed digital currencies would evolve to incorporate greater “smart” capabilities. He further noted that these assets could potentially leverage blockchain networks such as Ethereum.

China launched its digital Yuan in 2019, emerging as one of the earliest global real-world tests of CBDC. In addition to domestic trials, the PBoC initiated cross-border CBDC pilots in collaboration with central banks in Hong Kong, Thailand, and the United Arab Emirates in 2021.

This action aligned with China’s overarching “blockchain, not crypto” adoption, as highlighted by President Xi Jinping’s call for widespread blockchain adoption in October 2019. On the other hand, the Chinese authorities have opposed cryptocurrency adoption, prohibiting crypto transactions within China since 2021.

Meanwhile, the outcome of Qian’s investigation remains uncertain, as its effect on China’s blockchain and digital currency will be evident after the investigation. Nonetheless, this development mirrors the complex nature of regulating China’s evolving high-tech market.