China should lead the path of global digital currency: expert

"It is necessary to conduct a feasibility study on the issuance of a China-led path and implementation plan for a global digital currency," said Li Lihui, head of the blockchain research working group at the National Internet Finance Association of China.

Li told the audience at the 17th Caijing Annual Conference on Wednesday that he believes digital currencies will be placed at the heart of the global digital economy.

He said China ought to accelerate rule-making on the issuance of digital currencies and financial market regulation, quickly conduct research and development of national standards for digital financial technologies, and build a review and verification system for the application of such technologies.

"We must play an active part in building a global digital financial system and strive to have a say as we deserve," he said.

For now, China should further implement national strategies for a digital economy and technologies, launch preferential tax and fee policies for companies and talents specialized in digital technology R&D, develop independent intellectual property rights in key digital technology fields, and study digital legal tender, he said.

"The People's Bank of China, the central bank, has been studying digital currency electronic payments for five years, and is almost ready to launch China's own sovereign digital currency," said Mu Changchun, head of the central bank's digital currency research institute, at a forum in August.

However, PBOC Governor Yi Gang said in September there is no definite timetable for the roll-out of a digitized Chinese currency, which still has to go through a series of procedures of study, test, experiment, assessment and risk prevention.

China's digital currency will adopt parallel technical routes and adhere to the model of centralized management by the central bank. It will also adopt a double-tier operating and issuance system, which means it will be issued by the central bank to commercial banks and then distributed by commercial banks to the general public, said Li, who is also former president of the Bank of China Ltd.

Alan Greenspan, former chairman of the board of governors of the US Federal Reserve System, expressed different views on whether or not central banks should issue digital currencies.

"There is no point for them to do it," Greenspan said in a video address to the audience on Tuesday at the two-day conference of Caijing Magazine in Beijing.

He noted that national currencies are backed up by sovereign credit, something no other organization can offer.

"The fundamental sovereign credit of the United States is far in excess of anything Facebook can imagine," he said.

"How one handles the issue of digital currencies is really a political issue, not an economic issue," he added.

Facebook Inc unveiled plans for a new crypto-currency called Libra in June.

"Libra has been under huge regulatory pressure since it was announced … This is fundamentally because it may become a super-sovereign currency and reshape the international monetary system," Li said.