Sun 28 November 2021
By Dr Xue BAI
On 27 November 2021, UNSW Law’s Herbert Smith Freehills China International Business and Economic Law (CIBEL) Centre’s Co-Director Professor Heng Wang was invited to present on ‘Central Bank Digital Currency and Trade’ at the 2021 Virtual Conference of Asia WTO Research Network (AWRN), a premier regional network in international economic law.
In his presentation, Professor Wang largely explored two critical questions:
How central bank digital currency (CBDC) would likely affect trade? CBDC could be related to wide-ranging issues of trade ranging from subsidies and countervailing duties to data regulation. To illustrate, CBDC could be used in subsidies given its programmability. Here smart contracts are self-executing computer programmes that conduct tasks (e.g., payment) based on pre-determined conditions. CBDC also involves the issues such as the non-discrimination in CBDC-related services (e.g., financial services).
What does CBDC mean for firms, regulators, and other stakeholders? On the one hand, CBDC brings benefits such as reduced costs and enhanced efficiency in transactions. On the other hand, there are challenges including privacy protection, data flow, cyber security, possible divergent regulatory requirements and standards of different states. For instance, how does existing trade rules apply to trade practices related to CBDC such as interoperability and data flow?
Professor Wang argued that trade law practitioners and national regulators need to think of the impact of CBDC on trade. So does international organizations and other stakeholders in this field. There is a need for the trade community to address new issues and explore solutions for the new landscape in the digital age.