An official Chinese digital yuan, more than five years in the making, is now in pilot runs to slowly start replacing the physical legal tender.
The digital yuan, which will be pushed out to consumers via banks, seeks to restore this missing balance; it will allow authorities to “regulate an overstretched debt market more effectively”, says DBS Group Holdings economist Nathan Chow.
According to media reports, half the May transport subsidy for Suzhou municipal employees will be in the form of digital currency electronic payment, or DCEP, as it’s being called in the absence of a catchier moniker.
The digital yuan could find customers overseas, especially in places where China is making belt-and-road investments.
By distributing digital currency through banks, China has given its big institutions a chance to match the payment technology of fintech rivals.
