The People’s Bank of China. [Photo/Sipa]

The People’s Bank of China, the central bank, said on Tuesday that it will investigate and punish institutions and individuals that refuse to accept valid bank notes and coins and reiterated that it would protect the groups/individuals who find it inconvenient to use electronic or other noncash payment methods.

It is also a measure to ensure that physical money can continue to be in circulation and is protected by the nation’s laws, even as the digital yuan trials are accelerating. In the long term, bank notes (or coins), electronic payment platforms and the central bank’s digital currency will co-exist, said a senior PBOC official who did not want to be named.

Due to the novel coronavirus pandemic, cash rejections have increased forcing some face-to-face public services to be delivered online, even as noncontact consumption models are emerging. But some groups, especially the elderly people, are facing difficulties due to the absence of cash payments, PBOC official said.

The PBOC said in a notice published on Tuesday that cash is the most basic means of payment in China and hence institutions and individuals should not refuse to receive it. The PBOC has taken a number of measures to standardize the management of cash, improve the efficiency of circulation of cash, and ensure the rational, safe and smooth use of cash by the public, it said.

Meanwhile, the monetary authorities are accelerating the research on the digital yuan and said Beijing has finished “whole scale” tests of the digital currency for the upcoming Beijing 2022 Olympic Winter Games.

The tests were conducted at Beijing’s Shougang Industrial Park, which has evolved from an old steel production complex into the official location for the Beijing Organizing Committee for the 2022 Olympic and Paralympic Winter Games. The trials were jointly conducted by the digital currency institute of the PBOC and the local government, said Li Yan, deputy head of the local financial regulatory and management bureau in Beijing.

Policymakers had earlier said that they would build a pilot zone for the digital currency in Beijing, led by the PBOC, and the financial regulatory bureau of the municipal government and related departments, said Li.

Li Dongrong, president of the National Internet Finance Association of China, said the country will strive to participate in and even lead the formulation of international standards for digital currencies, mobile payments and digital banking, and aims to actively contribute to governance reforms of the global financial system.