China isn't the only country developing a digital currency. The digital yuan is a version of the normal Chinese currency deployed on a blockchain, which is the tamper-proof online ledger technology that underpins digital coins like bitcoin and ethereum. China is leading among major economies in issuing a CBDC – also called e-CNY, digital yuan, or Digital Currency Electronic Payment (DCEP), although the honor of being the first country to issue one went to the Bahamas last year. Yuan Chain Coin (YCC) is a cryptocurrency and operates on the Ethereum platform. By design, the digital yuan will negate one of bitcoin’s major draws: anonymity for the user. As part of a push to internationalize the yuan, China has been testing its digital currency on trading platforms around the world where it can be freely traded with other fiat currencies. The Biden administration has stepped up scrutiny of China's plans for the digital yuan, Bloomberg reported in April. Yuan Chain Coin has a current supply of 10,000,000,000 with 0 in circulation. ET Subscribe to RT newsletter to get stories the mainstream media won’t tell you, China to give away over $6mn in digital currency during Lunar New Year in massive e-yuan trials, Companies people love to hate: World’s most despised corporations, The dollar is close to a Wile E. Coyote moment when it drops off the cliff & plummets – Peter Schiff, EU countries lose almost 6 MILLION jobs due to Covid-19 pandemic, study finds. This website uses cookies. China is leading among major economies in issuing a CBDC – also called e-CNY, digital yuan, or Digital Currency Electronic Payment (DCEP), although the honor of being the first country to issue one went to the Bahamas last year. Hong Kong is in talks with China to expand cross-border testing of the digital yuan after the first phase proceeded smoothly, another step toward wider adoption of the currency. China’s version of a digital currency is controlled by its central bank, which will issue the new electronic money. It is expected to give China’s government vast new tools to monitor both its economy and its people. However, present and former Chinese finance officials have repeatedly tried to calm external concerns about competing with the U.S. dollar in their public remarks. Especially when the decision taken by the U.S. tends to be volatile," he said, illustrating that deals could be interrupted when made with countries such as Iran. A citizen pays with digital yuan during "May 5 Shopping Festival," Shanghai, China, May 2, 2021. China has no desire to replace the U.S. dollar with its digital yuan, Li said, adding, "The current development focus of the digital yuan is for domestic use.". Beijing is also setting up a legal framework for central bank digital currencies, or CBDCs, with global financial regulators. The digital yuan could transform cross-border trade due to its ability to process payments and handle foreign exchange transactions simultaneously, experts say. If all goes according to plan, China is likely to be the first country to roll out a CBDC, or DCEP / Digital Yuan in this case. In the longer term, the Chinese government plans for its digital currency to replace its physical currency across the country. Simply put, with China’s new digital yuan, international trade can be done in its own currency, the Renminbi. Although there remains no specific timeline for nationwide rollout of the digital yuan, as the PBOC's Deputy Governor Li Bo said at the Boao Forum last month, the second-largest economy's leading status in this domain has triggered a bunch of bold claims. Samuel Mok, former U.S. Treasury CFO, told CGTN that if China can successfully push the digital currency, it can threaten the domination of the U.S. dollar. The digital yuan is designed to replace cash in circulation, such as coins and bank notes, not money deposited long-term in bank accounts. “You have central bank digital currencies developed on various platforms such as enterprise blockchain Corda or Hyperledger, and the digital yuan is technically not even on a blockchain,” Michael Sung, co-director of the Fintech Research Center at Fudan University, said as quoted by CoinDesk. /CFP. Every nation on Earth is basically subjected to U.S. legislation because their banking systems clear in the U.S. dollar, Professor Luigi Zingales of the University of Chicago Booth School of Business told CGTN. That will help to have a platform where the digital yuan is technically, legally and financially interoperable with other countries’ digital currencies. The digital yuan will be linked to the holder's smartphone number, with transactions taking place through an app. The digital yuan (known officially as the DC/EP – Digital Currency Electronic Payment) is not available for trading at this time and is currently only in its early stages of trial. Digital Currency Electronic Payment (DC/EP) is a digital version of the yuan – China's national currency. Beijing ICP prepared NO.16065310-3, China accelerates national rollout of digital currency, Trying out digital currency at China's consumer products expo. China's Digital Yuan Could Be Used by Athletes and Visitors at the Beijing Olympics Chinese officials have touted the digital yuan as a futuristic currency that will make buying things more convenient and secure, and help those who don't have access to bank accounts. The number was nearly 400 times more than that in the U.S., according to Chinese financial data provider Wind. China has been steadily expanding tests of its sovereign digital currency, officially known as the Digital Currency Electronic Payment (DCEP). Pilot projects and trials of the digital yuan will be contentiously expanded in the future in order to build a digital ecosystem with improved security and reliability with corresponding legal and regulatory systems, Li said. Zingales also echoed the view. As part of a push to internationalize the yuan, China has been testing its digital currency on trading platforms around the world where it can be freely traded with other fiat currencies. It … All rights reserved. To that end, China’s central bank could also join an inclusive digital currency platform, where it can trade the digital yuan with other digital currencies freely. Alibaba Group Holding Ltd.’s online grocery service and food delivery units are included in China’s digital yuan pilot program, giving the sovereign electronic currency system access to the internet giant’s 1 billion users. In 2020, China saw transactions worth $67 trillion being processed through mobile payments. The project aims to help central banks with cross-border fund transfers, international trade settlement and capital market transactions. The electronic Chinese yuan is now being tested in cities such as Shenzhen, Shanghai and Beijing. Can fuel cell cars compete with the EV boom? China is the first major economy to issue a blockchain-enabled, digital version of its currency, the yuan, and this development has some in Washington worried that the … In 2020, China saw transactions worth $67 trillion being processed through mobile payments. Eight Thai banks and two Hong Kong banks, including HSBC, participated in the Note project and tested the feasibility of digital currency-based transactions between Thailand and Hong Kong. Their aim is to have the digital yuan be fully operational by 2022. Read ahead to know more The last known price of Yuan Chain Coin is 0.02164975 USD and is down -7.16 over the last 24 hours. "I think there is a demand for an alternative currency," he added. Users of Alipay, Alibaba’s mobile and online payment platform, find a “digital yuan” option in their payment options. Check it out here: Trying out digital currency at China's consumer products expo. China's central bank digital currency (CBDC) has showed up at the first China International Consumer Products Expo in south China's Haikou port city, giving foreigners at the event a taste of the payment experience it offers. With digital yuan pilots underway in China, it seems the currency is not meeting government expectations. China is trying to make it possible for foreign athletes and visitors to use its digital currency during the Beijing Winter Olympics in 2022, a top central bank official said on Sunday. One of the most often discussed recently was that the digital yuan will challenge the U.S. dollar for global prominence and shake up current global financial systems. A CBDC, unlike bitcoin that is based on a decentralized blockchain protocol, is issued and regulated by a central bank using a digital token to represent the virtual form of its fiat currency. Zhou Xiaochuan, former central bank governor and the founder of the digital yuan, said at the Boao Forum that the digital yuan would not cause a severe shock to the global financial system. In 2016 the PBoC initiated a digital currency research centre and then four years later the term “digital currency” surfaced in official documents, hinting that all lights are green on the Chinese cryptocurrency. China’s Digital Currency: the E-Yuan The People’s Republic of China is often mentioned as an upcoming innovation powerhouse, with fast developments in sectors such as high-speed railways and e-commerce. For more stories on economy & finance visit RT's business section. "I think if the Chinese government starts to issue a digital renminbi relatively fast, [it] might gain market share in that dimension", he said, adding that the U.S. is not ready to issue a digital currency yet. The People’s Bank of China has been developing the digital yuan, a so-called central bank digital currency that aims to replace some of the cash in circulation. China has a long-standing aim of internationalising its currency, and in time, the digital yuan may help with this initiative, making it easier to encourage users in other countries to use the yuan. May 18, 2021. The currency will be legal tender, so it could be exchanged without needing a bank as an intermediary. The digital yuan is a government-sponsored virtual currency designed to trace all movements of money. Beijing plans to get it ready in time for the 2022 Winter Olympics. “That is a very balkanized ecosystem.”. Digital currency focus: China’s yuan is a first for a major economy – expert insights 21st April 2021 20th April 2021 by Jarryd Neves Professor Sarah Hall of the University of Nottingham is a specialist in the changing nature of international financial centres. "I think there is an increasing resentment in a lot of countries in the world, and they don't want to be part of that. It is expected to give China’s government vast new tools to … Users will be able to transfer money between accounts by tapping phones, much like having physical cash change hands. Cryptos Why China’s digital yuan is ‘largest threat to the West’ in past 30 or 40 years, according to Kyle Bass Published: May 18, 2021 at 5:51 p.m. Why Digital Yuan Can’t Be a Key Currency. Read RT Privacy policy to find out more. One such platform is Inthanon-LionRock (Note), which is a central bank digital currency project for cross-border payments initiated by the Hong Kong Monetary Authority and the Bank of Thailand. Julia Chu, a 30-year-old saleswoman in Beijing, downloaded the PBOC app to get a 200 yuan (US$37) digital cash gift during a lottery draw in February, when the electronic currency … The People's Bank of China (PBOC), the central bank, carried out trials on the currency in about a dozen regions last year. It not only offers convenience and security but also the regulated, reserved-backed money circulation of the traditional banking system. The digital yuan is being developed by the People's Bank of China since 2014, back when one Bitcoin was worth less than $1,000. Essentially, instead of the value of transactions being hedged in US dollars, they can utilize a blockchain escrow in Renminbi, and the transaction doesn’t require US facilitation or any external entanglements. Experts say that for the digital yuan to achieve global adoption, China would need to work with trading partners or regional financial hubs. China's Digital Yuan is a version of the normal Chinese currency deployed on a blockchain. “China’s digital currency is as much about data as it is about money,” he added. Hong Kong (CNN Business) China is pushing forward with its experiment in creating a digital version of the yuan and may give foreign athletes and … © Autonomous Nonprofit Organization “TV-Novosti”, 2005–2021. But is it the future of Money? There are still plenty of hurdles for China's program to overcome before the new form of currency is entrenched in everyday life, though. "Let the market make choices. No other major power is as far along with a homegrown digital currency. The new Digital Yuan, as a means of payment, is intended for the retail sector and services in the domestic market of China. “China might want to negotiate with one central bank at a time and come up with a mechanism for everything ranging from a legal framework to exchange rate between the two currencies.”. He explained that the digital yuan at the current stage is mainly for small retail and online shopping. China’s version of a digital currency is controlled by its central bank, which will issue the new electronic money. China's emerging digital currency could enhance the yuan’s importance in the international financial system at the expense of the U.S. … Beijing is also setting up a legal framework for central bank digital currencies, or CBDCs, with global financial regulators. 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One of the more noteworthy projects in recent times is that of the digital national currency (数字人民币).