China’s digital currency project is possibly the world’s most advanced. The Digital Currency Electronic Payment (DC/EP) can bring consumers many benefits but may impact banks and existing third-party payment platforms. “Yet, if successfully deployed, the DC/EP may bring China one step closer to its goal for Yuan internationalisation”, says Michelle Qi, CIO, Equities, at Eastspring Investments.
However, the People’s Bank of China has yet to indicate when it will be available to the broader public. At the moment, the digital Yuan is tested in four Chinese cities.
The DC/EP will initially only be used for payments within China. “This is however likely to change over time, especially with the development of China’s Cross-Border Interbank Payment System, which allows Yuan-denominated transactions to bypass the western-dominated SWIFT system for international payments”, says Qi.
Read more at Eastspring.com/lu.