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 fiannce in favor of the yuan.
- China Finance said 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.