On May 5, the former Bank of China president Li Lihui took to a live broadcast to address his thoughts on the upcoming digital yuan. Firstly, the launch for the Digital Currency/Electronic Payment (DC/EP) is imminent and the potential for it to eventually replace physical renminbi (RMB) is high once critical mass is achieved in Chinese citizens adopting the use of DC/EP as their main medium of currency.
DC/EP was placed in comparison to digital payment solutions and wallets that are already widely used in China, such as WeChat Pay or Alipay. The main difference between DC/EP and these third-party payment apps is that the DC/EP is an independent currency and payments system. Its success is dependent on whether the DC/EP offers Chinese citizens lower transaction fees, greater ease of use and increased efficiency in clearing transactions.
There is also an anonymity feature in the system that allows users to send transactions anonymously, hiding the user’s identity and personal data involved in the transaction. However, Li also notes that access to this feature has to be limited. For example, users may only conduct a restricted number of anonymous transactions within a given time frame so as to discourage the occurrence of undesirable behaviour within the system.
A beta launch of the DC/EP app by the Agricultural Bank of China (ABC) was leaked on WeChat last month and a trial version of the app was available for download in four cities in China.