Digital Yuan: The Practice and Regulation of China’s Central Bank Digital Currency

Currency or its more commonly known name – money is at the heart of countries’ financial systems. Throughout history currency has developed from physical commercial commodities to precious metals like gold and silver and then to central bank-issued paper notes. The past decade has seen the rapid rise of cryptocurrencies such as Bitcoin Ethereum and Facebook’s Diem (previously known as Libra) posing great legal and regulatory challenges for policymakers and legislators.1 More recently global central banks have been leveraging on the financial technologies and testing Central Bank Digital Currencies (CBDCs) to modernise the fiat money system.

Clearly the importance of CBDCs has been well recognised by policymakers scholars and think tanks. According to the Bank for International Settlements 80% of 66 surveyed central banks were engaging...