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

Abstract

The People’s Republic of China is a leading experimenter in central
bank digital currencies (CBDCs). This Article explores the current
background, deployment, features, potential impacts, challenges, and
legal concerns of China’s CBDC: the electronic yuan, or E-CNY. This
Article 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. On the surface, E-CNY looks transformative. When you
dig a little deeper, however, most of the potential changes or
transformations turn on broader institutional, political, and legal changes
that, so far, have not accompanied the deployment of E-CNY. Without
those broader changes, the impact of E-CNY will likely remain limited,
and E-CNY may not be able to achieve its policy goals.

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