How to understand China's approach to central bank digital currency?

• Main Author: WANG, Heng
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2023
• Subjects: Central bank digital currency; CBDC; Digital yuan; e-CNY; China; Technology; Regulation; Asian Studies; Banking and Finance Law; Computer Law; Finance
• Online Access: https://ink.library.smu.edu.sg/sol_research/4301; https://ink.library.smu.edu.sg/context/sol_research/article/6259/viewcontent/How_to_Understand_China_s_Approach_CBDC_sv.pdf
• Institution: Singapore Management University

China's central bank digital currency (CBDC), digital yuan or e-CNY, is likely to profoundly affect the international financial system. China's CBDC is fast evolving. Understanding the influencing factors of China's CBDC will likely be crucial to explore its future direction. Major influencing factors include (i) China's perception and conception of regulation and technology, (ii) complementarity between China's preferences and CBDC development, (iii) domestic and international legitimacy, and (iv) institutional development. This paper argues that these influencing factors contribute to China's likely approach of selectively reshaping the international financial system. Given the potential wide-ranging implications of the introduction of CBDC globally, China's approach may be significant in the next evolution of money.