Download pdf
Why China Became the First Major Country to Implement the CBDC
- 1 Capital University of Economics and Business
* Author to whom correspondence should be addressed.
Abstract
It took only four years for China to transform CBDC research and development into pilot projects. Among the countries engaged in CBDC research, China may have made the fastest progress in CBDC research and development. However, the current research focuses mainly on mechanism and the design of e-cny and its geopolitical implications, and does not answer the question why the people's Bank of China became the first major country to implement CBDC. To answer these questions, this paper analyzes the institutional foundations from a macro strategic perspective that have allowed China and the PBoC to lead the world in testing CBDC. Then this paper analyzes China’s CBDC development process with a focus on the role of China’s financial regulatory institutions and policy innovation. It identifies the key agencies and key decision makers in the process of China’s CDBC research and development process. It also provides a comparative analysis of China’s institutional feature vis-à-vis the United States to further illustrate China’s institutional settings for it to be the first to launch CBDC.
Keywords
Central Bank Digital Currency (CBDC), the People's Bank of China (PBoC), China, Digital Currency Electronic Payment (DCEP)
[1]. Bank of England. Central Bank Digital Currency Opportunities, Challenges and Design [EB/OL]. (2020-03)
[2]. Bank of Canada. Central Bank Digital Currency: Motivations and Implications [EB/OL]. (2017-16)
[3]. Xu, Z., & Zou, C. (2021). Financial technology: Frontier and Trend. CITIC Press Group
[4]. The Eurosystem High-Level Task Force on Central Bank Digital Currency. (2020). Report on a digital euro (p. 25)
[5]. JP Koning, 2017.Evolution in cash and payments: comparing old and new ways of designing central bank payments systems, cross-border payments networks, and remittances. R3 Reports.
[6]. Yao, Q. (2019). Theoretical Analysis and Empirical Study on the Economic Effect of Central Bank Digital Currency. Studies of International Finance, 2019(01), 16–27.
[7]. Ping, P., & Peng, X. (2009). Research on the transmission of China's monetary policy (Chinese).
[8]. China financial Publishing House; Peng, X. (2020). The Dual Influence of the Central Bank Digital Currency and the Issuing Strategy of Digital RMB. Economic Review Journal, 2020(12), 77–85.
[9]. How low can you go? - speech by Andrew Haldane. (n.d.). from https://www.bankofengland.co.uk/speech/2015/how-low-can-you-can-go
[10]. He, D. (2020). The digital currency of China’s central bank and its development prospect. Macroeconomic Management, 2020(12), 24–30.
[11]. Xiang, K., & Wang, G. (2021). Driving Force, Impacts and Suggestions on the Issue of Central Bank Statutory Digital Currency. Research on Financial and Economic Issues, 2021(01), 64–73.
[12]. Chen, H., & Gong, X. (2021). Research on the Digital Currency of the Central Bank of China. Academic Exchange, 2021(02), 118–131.
[13]. BIS. Central Bank Digital Currencies: Foundational Principles and Core Features [EB/OL]. (2020-10-9)
[14]. Sveriges Riksbank.E-krona Project, Report 2[EB/OL]. (2018-10)
[15]. BIS. Committee on Payments and Market Infrastructures, Markets Committee Central Bank Digital Currencies[EB/OL]. (2018-03-12) https://www.bis org/cpmi/publ/d174.pdf.
[16]. Dyson B. Hodqson Digital Cash Why Central Banks Should Start Issuing Electronic Money[EB/OL] (2016-01).
[17]. Wang, P., Bian, W., & Ji, Y. (2020). Central Bank Digital Currency: The Definition and Developments. Review of Industrial Economics, 2020(05), 63–79.
[18]. Chen, Y., Yu, J., & Li, Z. (2020). The economic effect and prudent management approach of central bank digital currency (Chinese).. Dongyue Tribune, 2020,41(12), 121–128.
[19]. Dyson B, Hodgson, G Digital Cash: Why Central Banks Should Start Issuing Electronic Money[EB/OL]. (2016-01) https://positivemoney.org/publications/digital-cash/.
[20]. Monetary Authority of Singapore. Project Ubin: Central Bank Digital Money Using Distributed Ledger Technology[EB/OL]. (2020-04-02) https://www.mas.gov.sg/schemes-and-initiatives/project-ubin.
[21]. Eastern Caribbean Central Bank. ECCB Digital EC Currency Pilot: What you Should Know[EB/OL]. (2020-01-27) https://www.eccb-centralbank.org/p/what-you-should-know-1.
[22]. Jiang, J., & Lucero, K. (2021). Background and Implications of China’s E-CNY.
[23]. Yao, Q. Experimental Study on Prototype System of Central Bank Digital Currency. Journal of Software, 2018(9), 2716–2732.
[24]. Cheng, X. (2022). The influence and response of central Bank digital currency on commercial banks (Chinese). Contemporary Economic Management.
[25]. Cheng, Xuejun. “The Development Risk,International Comparison and Governance Path of Residents’ Leverage Ratio.” Economist, vol. 2021(11), Nov. 2021, pp. 43–51.
[26]. Wen, X., & Zhang, B. (2016). The impact of digital currency on monetary policy. China Finance, 2016(17), 24–26.
[27]. Bai, J., & Ge, H. (2021). Central bank digital currency gives RMB internationalization opportunity (Chinese). China Economic Weekly, 2021(19), 111–112.
[28]. Digital RMB research and development working group of the PBOC. (2021). White paper on research and development progress of China’s digital RMB. www.pbc.gov.cn/goutongjiaoliu/113456/113469/4293590/2021071614200022055.pdf (pp. 17–19).
[29]. General Office of the CPC Central Committee and general office of the State Council. (2020). the comprehensive reform pilot implementation plan for building a leading demonstration area of socialism with Chinese characteristics in Shenzhen (2020-2025).
[30]. Ministry of Commerce of the People’s Republic. (2020). The overall plan for comprehensively deepening the pilot of innovative development of service trade (Chinese). http://images.mofcom.gov.cn/fms/202008/20200814092010526.pdf
[31]. National Development and Reform Commission. (2021). The implementation plan for accelerating the cultivation of new consumption (Chinese).
Cite this article
Yang,Y. (2023). Why China Became the First Major Country to Implement the CBDC. Advances in Economics, Management and Political Sciences,7,136-147.
Data availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
Disclaimer/Publisher's Note
The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of EWA Publishing and/or the editor(s). EWA Publishing and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions or products referred to in the content.
About volume
Volume title: Proceedings of the 2nd International Conference on Business and Policy Studies
© 2024 by the author(s). Licensee EWA Publishing, Oxford, UK. This article is an open access article distributed under the terms and
conditions of the Creative Commons Attribution (CC BY) license. Authors who
publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons
Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this
series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published
version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial
publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and
during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See
Open access policy for details).