The transition to a cashless society has been in progress for some time. Digital central bank money is the next logical step. As with digital payments, China is taking a pioneering role with the Digital Currency Electronic Payment Project, says Christian Vondenbusch, Portfolio Manager at Lombard Odier Investment Managers. While Western countries are still taking their time to introduce digital currencies, four major cities in China are already testing the digital yuan in practice.
In April 2020, the Digital Currency Electronic Payment project was launched in Shenzhen, Suzhou, Xiong’an and Chengdu. According to China’s People’s Bank, the new digital currency could be ready for use by the Winter Olympics in Beijing in 2022.