China's central bank releases white paper on digital yuan development

A visitor tries out a coffee vending machine that accepts payment with digital Chinese yuan (e-CNY) at the first China International Consumer Products Expo in Haikou, capital of south China's Hainan Province, May 8, 2021. (Xinhua/Guo Cheng)

BEIJING, July 16 (Xinhua) -- China's central bank on Friday released a white paper on the progress of the country's digital fiat currency, or the e-CNY. It summarized the currency's background, technology roadmap and development objectives.

The e-CNY is the digital version of the fiat currency issued by the People's Bank of China and it is handled by authorized operators. It is a value-based, quasi-account-based and account-based hybrid payment instrument with legal tender status and loosely-coupled account linkage, the white paper clarified.

As the digital economy develops, the share of transactions made using cash is rapidly declining in China.

Meanwhile, a variety of so-called cryptocurrencies such as Bitcoin pose potential risks to financial security and social stability, given their lack of intrinsic value, acute price fluctuations, low trading efficiencies and huge energy consumption, the white paper noted.

The development of the e-CNY system aims to create a new form of RMB that meets the public demand for cash in the digital economy era.

"Supported by a retail payment infrastructure that is reliable, efficient, adaptive and open, the e-CNY system will bolster China's digital economy, enhance financial inclusion, and make the monetary and payment systems more efficient," read the white paper.