The genesis, design and implications of China’s central bank digital currency

ABSTRACT The People’s Bank of China (PBC) was among the first in the world to start exploration of central bank digital currency (CBDC) and will probably be one of the first major central banks releasing its own CBDC. This article intends to explain the construction of the e-CNY and discuss its likely implications. While PBC tried hard to avoid causing disintermediation of commercial banks, it remains to be seen if there will be a shift from commercial banks savings accounts to the new e-CNY wallets. E-CNY’s impacts on existing mobile payment system and the associated collection and analyses of big data in the Fintech sector could be major. In summary, even the modest step of creating e-CNY could significantly transform the financial landscape in China. But this is only the step by PBC in creating its own CBDC.