But no major power is as far as China. His early steps could signal where the rest of the world is going with digital currencies.
“This is more than just money,” said Yaya Fanusie, a staff member at the Center for Economic and Financial Power, a think tank and author of a recent paper on the Chinese currency. “It’s about developing new tools to collect data and use that data to make the Chinese economy smarter and based on real-time information.”
While the Chinese government has not said if and when it will officially roll out the eCNY nationwide, several officials have mentioned that it is ready for tourists arriving for the Beijing 2022 Olympics. Recent articles and speeches from officials at People’s Bank of China, the country’s central bank, underscored the project’s ambitions and desire to be the first.
“The right to issue and control digital currencies is becoming a ‘new battlefield’ of competition between sovereign states,” said a September article in China Finance, the central bank’s magazine. “China has many advantages and opportunities in issuing fiat digital currencies, so it should accelerate to take the first path.”
The People’s Bank of China did not respond to a request for comment.
The development of a national digital currency began in 2014 when the People’s Bank of China set up an in-house group to work on one soon after Bitcoin caught the country’s attention. In 2016, the central bank created a division called the Digital Currency Institute. Last year, according to research by Sino Global Capital, a financial investment firm, trials of eCNY were started in the cities of Shenzhen, Suzhou, Xiongan and Chengdu.
People invited to trial through a lottery on WeChat or other apps could click a link and receive a balance of 200 electronic yuan, which was sometimes displayed in their banking app over an image of an old-fashioned Chinese banknote with Mao Zedong’s face . To spend the money, users can use an eCNY app to scan a retailer’s QR code or create a QR code that the retailer can scan.
ECNY’s design borrows few minor technical elements from Bitcoin and does not use what is known as blockchain technology, a ledger-like system that most cryptocurrencies rely on, officials at People’s Bank of China have said.