BEIJING, March 22 (Xinhua) — China’s digital yuan pilots and tests are making steady progress, according to a researcher under the People’s Bank of China, the country’s central bank.

During a summit at the China Development Forum 2021, Mu Changchun, head of the central bank’s digital currency research institute, dismissed concerns of user privacy infringement, saying the digital currency has the highest level of privacy protection among existing payment tools.

China’s digital yuan, although still in its pilot phase, will include more people in the rapidly developing digital era, making daily life easier and digital payments more secure.

The digital currency will be issued by the country’s central bank and legally backed by the government as an alternative to paper money.

China will steadily advance the research and development of digital currencies and actively participate in the formulation of international rules and technical standards on data security, digital currencies and data tax, according to the outline of the country’s 14th five-year plan for national economic and social development and the long-range objectives through the year 2035.

Other countries including Canada and Japan have also been gearing up preparations for digital currencies.

“The use of cash will be reduced by at least 40 percent in the coming decade,” predicted Zhu Min, chairman of the National Institute of Financial Research at Tsinghua University, as central bank-backed digital currencies will become more common globally.