The People’s Bank of China believes that one of the main benefits of the digital yuan launch is the ability to weaken the dominance of the US dollar.
According to the official publication of the People’s Bank of China, China Finance, one of the main advantages of the launch of the Digital Currency of China Electronic Payment System (DCEP) is the weakening of the role of the US dollar in international relations in favor of the yuan. The publication says:
“China has many advantages and opportunities in issuing fiat digital currencies, so it must accelerate its pace to become a leader in this area.”
China Finance says the ability to issue and distribute digital currencies opens up a new area of contention – a “new battlefield” between countries. Another benefit of DCEP is that it can collect payment data more efficiently, which can help better advance monetary policy. According to the publication, this will help the economic rebirth after the pandemic of COVID.
According to China Finance, the digital yuan has been in development for six years and is now being tried out by banks and corporations and in several regions. The article also notes the comprehensive research undertaken by the project and discloses 130 DCEP-related patent applications filed to date. These applications include the issuance, circulation and related applications of the NBK cryptocurrency, as well as the formation of a supply chain that will support DCEP’s operations.
Recently, Deputy Governor of the People’s Bank of China (PBC) Fan Yifei said that the PBC’s digital currency would be equivalent to the yuan and subject to the same laws.
