Cryptocurrencies

China Sees Advantages in Being First on New Digital Currency ‘Battlefield’

People's Bank of China HQ in Beijing (humphery/Shutterstock)

Unlike many other central banks, China’s sees concrete benefits in being the first to launch a digital currency, according to China Finance, a magazine from the People’s Bank of China (PBoC).

  • Reported by Reuters Monday, the article said that among the benefits of the digital currency – dubbed DCEP, for digital currency electric payment – would be the weakening of the dollar’s role in international fiance in favor of the yuan.
  • China Finance said that the ability to issue and control a digital currency would herald a new area of competition – a “new battlefield” between nations.
  • Another advantage of the DCEP system would be the better feedback of payments data, which could help better promote monetary policy.
  • That, in turn, could help economic recovery post-coronavirus, according to the article.
  • The digital yuan has been in development for six years and is now in testing at banks and corporations in a number of regions.
  • The article also highlighted the extensive research that has gone into the project, citing the 130 patent applications that have been lodged so far.
  • These span cryptocurrency issuance, circulations and related apps, forming a supply chain that would support DCEP, the central bank magazine said.

Also read: PBoC Says Digital Yuan Tests Focus on Small Transactions After Rumored Property Sale

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