China is on the verge of launching the digital yuan, also known as the Digital Currency Electronic Payment (DCEP). This sovereign digital currency can potentially impact the global economy and trade; it could possibly replace the US dollar as the world’s reserve currency.
What is the Digital Yuan?
China aims to replace some of the cash in circulation with the digital yuan. The People’s Bank of China (PBOC), China’s central bank, and other stakeholders have been working on a national digital currency since 2014. Zhou Xiaochuan, the then PBOC chief and a long-time advocate of an alternative to the dollar, had initiated the project.
