Context:
In Feb 2021, China launched another round of trials for its new digital currency. China is expected to roll its currency by Feb 2022, before the winter Olympics in Beijing. China's trials have placed it ahead of the rest of the countries. These trials also gave a look into how a central bank-issued digital tender may impact the world of digital payments.
About China’s Digital Currency :
- The digital RMB (or Renminbi, China’s currency), officially titled the Digital Currency Electronic Payment (DCEP), a digital version of China’s currency.
- It can be downloaded and exchanged via an application authorized by the People’s Bank of China (PBOC), China’s central bank.
- Apart from China, other countries have begun pilot trails such as Sweden, Thailand, and South Korea.
Key features of the digital currency:
- The Central Bank guarantees this as a legal tender.
- No transaction fee.
- No third-party involvement.
- No internet connectivity is required for digital currency. The payment is made through Near-field Communication (NFC) technology.
