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China Charges Ahead with National Digital Currency


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A sign for Chinas new digital currency, eCNY, in a store window.

China has charged ahead with a bold effort to remake the way that government-backed money works, rolling out its own digital currency with different qualities than cash or digital deposits.

Credit: Gilles Sabri/The New York Times

China is forging ahead with a national digital currency called the electronic Chinese yuan (eCNY), with government presentations indicating the People's Bank of China recently expanded trials of the currency to major cities like Beijing and Shanghai.

Unlike decentralized cryptocurrencies such as bitcoin, national digital currencies are firmly controlled by the government.

People's Bank officials said the eCNY does not use the blockchain technology that most cryptocurrencies rely on, and recipients have only a few weeks to spend the digital currency before it disappears.

The eCNY could further empower China's government to monitor finance channels because a digital currency system can record all transactions.

Yaya Fanusie at the nonprofit Foundation for Defense of Democracy's Center on Economic and Financial Power think tank said China's initiative is "about developing new tools to collect data and leverage that data so that the Chinese economy is more intelligent and based on real-time information."

From The New York Times
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Abstracts Copyright © 2021 SmithBucklin, Washington, DC, USA


 

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