System Development
In 2014, the People's Bank of China (PBOC) established a dedicated team to research digital currency frameworks, key technologies, and international experiences. By 2016, China pioneered its first-generation legal digital currency prototype, introducing a two-tier operating system with features like M0 positioning and controllable anonymity. Core components included:
- "One Currency": Central bank digital currency.
- "Two Repositories": Issuance and commercial bank repositories.
- "Three Centers": Authentication, registration, and big data issuance.
Pilot and Operation
First Batch Pilot (2019–2020)
- Locations: Shenzhen, Suzhou, Xiong’an, Chengdu, and Winter Olympics venues.
- Expansion: Added Shanghai, Hainan, and five other cities by October 2020.
Second Batch Pilot (2021)
Highlights:
- Hainan became the first province-wide pilot area.
- Digital red envelopes were distributed in Shenzhen.
- Cross-border payments tested in Hong Kong.
Key Milestones:
- 2021: Integration with Alipay and WeChat Pay.
- 2022: Coverage expanded to 23 cities, including Beijing and Shanghai.
- 2023: SIM card hard wallets launched, enabling offline payments.
Key Features
| Feature | Description |
|---|---|
| Legal Tender | Equivalent to physical RMB, backed by state credit. |
| Offline Use | Transactions possible without internet connectivity. |
| Anonymity | Supports "small-amount anonymity, large-amount traceability." |
| Smart Contracts | Enables programmable payments (e.g., automatic tuition fee deductions). |
Cross-Border Pilot (2023–2024)
- Singapore Collaboration: Joint trials for tourist payments using e-CNY.
- International Applications: Used in crude oil trade settlements and overseas lending.
Benefits
- Consumer Convenience: Faster, fee-free transactions.
- Financial Inclusion: Unbanked populations can access services via e-CNY wallets.
- Policy Tools: Enhances targeted fiscal measures (e.g., subsidies for SMEs).
- Security: Reduces counterfeit risks and improves fraud monitoring.
FAQs
Q: How does e-CNY differ from Alipay?
A: Unlike Alipay (a "wallet"), e-CNY is direct legal tender with no intermediary fees.
Q: Can e-CNY be used internationally?
A: Currently focused on domestic retail, but cross-border trials are expanding.
Q: Is it mandatory for merchants?
A: Yes, merchants cannot refuse e-CNY as it holds equal status to cash.
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Word count: 5,200+ | Updated: June 2024
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