China has promised the world an all-digital currency. The digital yuan will replace physical cash with a digital twin: A monetary means of exchange guaranteed by the central bank and issued to consumers made up of code.   

Announced in 2014, China’s central bank digital currency, dubbed Digital Cash/Electronic Payments (DCEP), was slow to take off. Officials quickly accelerated their efforts in the summer of 2019 when Facebook announced it was working on its own digital currency, Libra.

Media and fintech enthusiasts have been speculating about its grandiose effects: It will topple the dollar and upend the international order, the story goes. The US must catch up or say goodbye to its reign as a financial leader.

Bottom line: We don't know much about the DCEP, and we probably won't until it's ready for prime time. What we do know indicates that, despite the hype, national implementation is a long way off. Current pilots are limited to very few select individuals. The PBOC has said it will still be testing the DCEP in 2022. But rising political tensions with the US are likely to further accelerate the PBOC’s schedule. We could see a wide rollout of the DCEP within the next year.

What’s wrong with cash? The People’s Bank of China (PBOC), hopes to solve many of the government’s biggest currency headaches:

What’s wrong with e-payments? China is often called a cashless society, but this is not true for everyone.

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Eliza Gkritsi

Eliza is TechNode's community listening reporter at the Shanghai office. She acts as a link between the editorial team and TechNode Squared members. She previously worked as a reporter for WikiTribune...