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As an example, the e-CNY ranges from 10,000 transactions per second to a projected future capability of 300,000, compared to over 500,000 for Alipay at its 2019 peak. The e-CNY system is still technologically inferior to these alternatives in terms of capacity and scalability. The private sector digital payment service market is very popular in China, but is owned almost entirely by Alipay (over 50 percent market share) and WeChat Pay (almost 40 percent market share), which boast over one billion users each. Some observers have pointed out that a centralized digital currency would allow Beijing to more closely watch both individual transactions and the powerful Chinese private financial technology sector.Īlthough China already has a substantial digital payment market and infrastructure, the digital yuan has so far had trouble breaking into that market. Meanwhile at home, the Chinese government has long been clear on its intention to limit the power and market share of both commercial banks and digital payment corporations that operate independent of the state, especially Alipay (owned by Alibaba) and WeChat Pay (owned by Tencent).

dollar (nearly 40 percent) and the Euro (over 35 percent), in stark and disproportionate contrast to China’s 2 nd place share of global GDP (17.9 percent to the U.S.’ 24.4 percent). At around 3 percent of international payments the renminbi is a distant 4 th place to the U.S. In 2021 China joined a number of other countries in exploring the possibilities of using digital currencies for cross-border transactions, a decision in line with Beijing’s long-term goal of boosting the yuan’s relatively low use outside of the Chinese domestic market. While a timeline for the final launch of the digital renminbi is uncertain, China’s goals in creating one are much clearer.

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2022 also saw the e-CNY’s highly anticipated trial launch at the 2022 Winter Olympics – the first of such trials to include foreign visitors. As of April 2022 further expansions are planned for other major Chinese cities and Hong Kong, as well as a likely release at the Fall 2022 Asian Games. These tests were expanded in 2021 to Hainan province, Shanghai, and a number of other cities. Though the Chinese government is further ahead in digital currency research than any other major economy, these economic and political challenges mean that after nearly a decade of development and several years of localized testing there is still no clear date for a full-scale launch of China’s digital renminbi (also known as the digital yuan, or e-CNY).Ĭhina has been exploring a potential digital currency since 2014, although the first actual test of the e-CNY system was not until 2020 with an initial trial launch in Shenzhen, Suzhou, Chengdu, and Xiong’an. Yet the reality is more complicated than that, as China’s digital currency project faces a variety of challenges at home and abroad. Over the past several years China has been steadily making progress towards a digital renminbi, and now seems poised to become the first major economy to launch an official central bank digital currency (CBDC). 'New Perspectives on Asia' highlights the research of junior CSIS staff and interns on issues that are quietly shaping the world's most dynamic region.

Responding to Egregious Human Rights AbusesĬhina's Progress Towards a Central Bank Digital Currency.

Building Sustainable and Inclusive Democracy.

Family Planning, Maternal and Child Health, and Immunizations.

Energy, Climate Change, and Environmental Impacts.

Weapons of Mass Destruction Proliferation.

Defense Industry, Acquisition, and Innovation.

Intelligence, Surveillance, and Privacy.