The e-CNY, also known as Digital yuan or digital RMB introduced by PBOC (People Bank of China), is the electronic form of Chinese Renminbi, and like Chinese Renminbi, it aims to circulate around deposit accounts and other transactions method. China has adopted to work on a mechanism of the cashless economy through Chinese digital currency e-CNY targets to replace the dollar as the world’s reserve currency. 

It is not meant to infuse the economy with more cash and lead the economy towards inflation or increase the money supply, but it will act just as a replacement for cash. The PBOC has planned to test its usability through 750k lottery driven participants with its impact on the both domestic and international transaction. It is further planned by Chinese authorities to use e-CNY during the 2022 Winter Olympic games and introduced it to foreign visitors. 

With each passing day, China is on its way to make digital yuan on a large-scale adoption reinforced by big corporations like Ant group, MasterCard, Tencent and e-commerce JD.com. To fully utilize the competitive advantage, big firms such as JD.com in China are introducing digital yuan to their services such as cross-bank payments, B2B transactions and even the employees at JD.com are paid in digital-yuan. 

The currency sovereignty will be protected and maintain its legal currency status while providing partially anonymity of payments with the control of money-laundering and to enable transaction in developing and US-empowered nations. It will help improve efficient transaction with the central bank coordinating directly with the customers and flexibility in cash distribution. 

Payment services already existing in the market, such as AliPay, WeChat Pay, and PayPal, makeup 93% of online payment wallet providers, so why should people use Digital yuan? The answer is simple: it provides people with great value without losing their purchasing power, provision of money across the border, offline transactions are possible, transactions that require only digital wallet in contrast to Ali pay and WeChat pay and above all 100% backed up by Chinese bank reserves. It would also allow China to monitor transactions inhabiting political and privacy challenges.

Digital yuan would boost up the crypto and lower the coin base. Still, the cryptocurrency market is banned, and mining that doesn’t allow capital fright could be considered a beneficial business activity. Like cryptocurrency, the digital yuan is based on Binance smart Chain, blockchain technology, and third-party authority regulation and compliance standards.