China’s digital yuan is an example of a central bank digital currency which aims to replace some of the cash in circulation.
Interest in China’s digital yuan project could in part be driven by the surging price of bitcoin, China’s central bank said Thursday, even as the cryptocurrency is effectively banned in the world’s second-largest economy. China’s digital yuan is an example of a central bank digital currency (CBDC) which aims to replace some of the cash in circulation. The the People’s Bank of China (PBOC) sees it as a way to advance cashless payments. It is effectively a digital version of fiat currency. The central bank has been working on a digital currency since 2014. Speaking to reporters, Wang Xin, PBOC research bureau director, said market interest in the digital yuan is “very strong and everyone is paying close attention.” “On one hand, this is related to more and more central banks in the world participating in the development of domestic digital currencies,” Wang said, according to a CNBC translation of his Mandarin comments.
