Background and Implications of China's Central Bank Digital Currency: E-CNY

26 Pages Posted: 22 Mar 2021 Last revised: 1 Apr 2021

See all articles by Jiaying Jiang

Jiaying Jiang

University of Florida Levin College of Law

Karman Lucero

Paul Tsai China Center, Yale Law School

Date Written: January 11, 2021

Abstract

The People’s Republic of China is a leading experimenter in central bank digital currencies (CBDCs). This paper explores the current background, deployment, features, potential impacts, challenges and legal concerns of China’s CBDC, the electronic yuan, or E-CNY. This paper explains the potential significance of what is known and not known about E-CNY with a particular focus on how E-CNY might fit into existing legal and economic systems, both within China and internationally. Section 1 discusses the development of E-CNY, including known technical features, institutional framework, and E-CNY’s intended role in China’s domestic monetary system. Section 2 explores China’s motivations for developing and deploying E-CNY most of which are focused on domestic concerns, though there are important international dynamics as well. Section 3 outlines a number of potential impacts of E-CNY, including domestic impacts on online payment platforms such as Alipay and WeChat Pay and commercial banks as well as impacts on international settlements and countries involved in the Belt and Road Initiative. Section 4 addresses key challenges and concerns around E-CNY, particularly as it pertains to information access and sharing, privacy protections, due process rights, and various technical issues. The last section examines E-CNY in the context of additional legal paradigms, including taxation, antitrust, anti-money laundering, and fraud prevention.

Keywords: Central Bank Digital Currency, China's E-CNY

Suggested Citation

Jiang, Jiaying and Lucero, Karman, Background and Implications of China's Central Bank Digital Currency: E-CNY (January 11, 2021). Available at SSRN: https://ssrn.com/abstract=3774479 or http://dx.doi.org/10.2139/ssrn.3774479

Jiaying Jiang (Contact Author)

University of Florida Levin College of Law ( email )

P.O. Box 117625
Gainesville, FL 32611-7625
United States

Karman Lucero

Paul Tsai China Center, Yale Law School ( email )

127 Wall Street
New Haven, CT 06510
United States

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