(China) China’s Digital Currency (CNAS)

By Yaya J. Fanusie and Emily Jin

China is pushing aggressively to be a global leader in financial technology. Over the last several years, use of mobile payment platforms has exploded in China while cash transactions have declined. At the same time, global interest in the development of central bank digital currencies (CBDCs) has also risen, with dozens of central banks now researching ways to offer digital versions of their fiat currency to ordinary citizens. The People’s Bank of China (PBOC) is leading in these efforts, aiming to release a central bank digital currency of its own. This CBDC system, which the Chinese government calls Digital Currency/ Electronic Payment (DCEP), will likely enable the Chinese Communist Party (CCP) to strengthen its digital authoritarianism domestically and export its influence and standard-setting abroad. By eliminating some of the previous constraints on government data collection of private citizens’ transactions, DCEP represents a significant risk to the long-held standards of financial privacy upheld in free societies.