Transferring money without bank accounts or even an internet link by just touching two phones together? A dream like this could become a possibility now
As the popularity of Bitcoin and cryptocurrencies increased in China, the country’s central bank, the People’s Bank of China (PBOC), established an internal committee in 2014 to work on the digital currency. The PBOC founded the Digital Currency Research Institute in 2017 to assist in the development of the currency. This project was underway for the last seven years to create a digital Chinese currency.
Finally, China has introduced its first Central Bank Digital Currency (e-CNY), or Digital Yuan, which was developed using its new payment system and it’s built on top of Binance Smart Chain blockchain. The Electronic Payment providers are going to implement the integration of this token for digital payments; the top of list Chinese companies in the earlier trials are Tencent’s WeChat Pay, Alibaba’s, Alipay.
Digital money intends to replace cash in circulation rather than long-term bank deposits. Commercial banks will potentially be involved in distributing digital currencies and will be required to deposit the same amount of reserves with the e-CNY as they distribute. Both commercial and central banks including Blockchain holders are keeping the detailed records of the flow of digital currency, so the beauty of this token is, it can’t be stolen or spend illegally, in any of these cases the transfer will be traced and the first holder will get the same amount of e-cny with official police complaint anywhere in the world.
In recent years, China has moved closer to being a cashless country. Cashless transactions accounted for four out of five payment transactions in 2020, totaling 320 trillion yuan (US$49 trillion). e-CNY would eventually lead to a cashless world.
Each e-CNY is exchangeable for a corresponding exchange rate to the Chinese yuan backed by the Chinese government. Suppose an e-CNY has been minted and released In that case, it can be exchanged, stored, and spent by various businesses (exchanges, wallets, financial services) and individual traders trying to escape the cryptocurrency markets’ often severe uncertainty, and the security backed by Chinese Bank Reserves.