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China sees concrete benefits in being the first to launch a digital currency, unlike many other central banks, according to China Finance, a magazine from the People’s Bank of China (PBoC).
Reported by Reuters earlier in the week, 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 finance 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.
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