China has given away millions in its digital yuan trials. This is how it works
GUANGZHOU, China — China is arguably leading the world in developing a national digital currency, a project it has been working on since 2014.
The People’s Bank of China (PBOC) has been spearheading work on the digital yuan, a so-called central bank digital currency (CBDC) that aims to replace some of the cash in circulation.
Real world trials are already underway in the world’s second-largest economy. Here’s what we know so far about the digital yuan or its official name — the Digital Currency Electronic Payment (DCEP).
What is the digital yuan?
It’s effectively a way for the central bank to digitalize bank notes and coins in circulation. The Chinese market is already very advanced in cashless payments. The digital yuan would be a way to speed that process up.
It will be legal tender in China and no interest will be paid on it.
“The use of cash is decreasing. Eventually cash will be replaced by something in digital format. That is one of the big drivers behind this,” Yan Xiao, project lead for digital trade at the World Economic Forum, told CNBC.
Read More at https://www.cnbc.com/2021/03/05/chinas-digital-yuan-what-is-it-and-how-does-it-work.htm