The e-CNY pilot is an ongoing initiative by the People’s Bank of China (PBoC) to test and promote the use of digital currency in China. Pilot launch: The e-CNY pilot was first launched in 2019 in several cities, including Shenzhen, Suzhou, Chengdu and Beijing. It involved the distribution of digital currency to selected individuals and businesses for trial use. Dual offiine payment system: One of the key features of the e-CNY pilot is the dual offline payment system, which allows transactions to be made without an internet connection. This feature ensures the reliability and availability of digital payments, even in areas with poor network coverage. Integration with existing payment systems: The e-CNY is designed to work alongside existing payment systems, such as Alipay and WeChat Pay. It aims to enhance the efficiency and security of digital transactions while providing interoperability with popular mobile payment platforms. Retail and wholesale use: The pilot has been conducted in both retail and wholesale scenarios. Retail use involves small-scale transactions, such as everyday purchases, while wholesale use focuses on larger transactions, such as business-to-business payments. Merchant acceptance: During the pilot, various merchants, including restaurants, supermarkets and online platforms, have been encouraged to accept e-CNY payments. This helps to establish an extensive network of acceptance points and increases the convenience for users. Privacy and security: The e-CNY pilot emphasizes the importance of privacy and security. Transaction data is encrypted and stored securely, ensuring the protection of user information. However, the central bank maintains the ability to monitor and trace transactions to prevent illegal activities. User experience: The pilot aims to provide a smooth and user-friendly experience for e-CNY users. Mobile apps and digital wallets have been developed to facilitate transactions, allowing users to easily send, receive and manage their digital currency. Cross-border use: The e-CNY pilot has explored the potential for cross-border use. Lessons learned: Technical infrastructure: Building a robust and scalable technical infrastructure is crucial for the successful implementation of digital currency. It requires coordination between financial institutions, technology providers and regulatory bodies to ensure smooth operations and user experience. The project employed a large team to build and deploy the digital currency and focused on public-private sector collaboration in order to deliver this result. Public acceptance: Widespread adoption of digital currency relies on public acceptance and trust. Educational campaigns and outreach programmes can help promote awareness and understanding among the general population, fostering confidence in the new payment system. Interoperability: Integrating digital currency with existing payment platforms is essential for user convenience and acceptance. Ensuring interoperability between different payment systems and establishing a seamless user experience should be a priority. Cross-border collaboration: Exploring opportunities for cross-border use and collaboration with other countries can enhance the global reach and potential impact of digital currencies. Cooperation between central banks and regulatory bodies is essential to address legal and regulatory challenges. CA S E S T UDY 1 China: e-CNY Central Bank Digital Currency Global Interoperability Principles 16
RkJQdWJsaXNoZXIy NzQwMjQ=