quality:correction, structural:expansion
Digital renminbi

In October 2019, China's central bank, PBOC, announced that a digital reminbi is going to be released after years of preparation. This version of the currency, also called DCEP (Digital Currency Electronic Payment), can be “decoupled” from the banking system to give visiting tourists a taste of the nation's burgeoning cashless society. The announcement received a variety of responses: some believe it is more about domestic control and surveillance. Some argue that the real barriers to internationalisation of the renminbi are China's capital controls, which it has no plans to remove. Maximilian Kärnfelt, an expert at the Mercator Institute for China Studies, said that a digital renminbi "would not banish many of the problems holding the renminbi back from more use globally". He went on to say, "Much of China's financial market is still not open to foreigners and property rights remain fragile."

The PBOC has filed more than 80 patents surrounding the integration of a digital currency system, choosing to embrace the blockchain technology. The patents reveal the extent of China's digital currency plans. The patents, seen and verified by the Financial Times, include proposals related to the issuance and supply of a central bank digital currency, a system for interbank settlements that uses the currency, and the integration of digital currency wallets into existing retail bank accounts. Several of the 84 patents reviewed by the Financial Times indicate that China may plan to algorithmically adjust the supply of a central bank digital currency based on certain triggers, such as loan interest rates. Other patents are focused on building digital currency chip cards or digital currency wallets that banking consumers could potentially use, which would be linked directly to their bank accounts. The patent filings also point to the proposed ‘ tokenomics ’ being considered by the DCEP working group. Some patents show plans towards programmed inflation control mechanisms. While the majority of the patents are attributed to the PBOC's Digital Currency Research Institute, some are attributed to state-owned corporations or subsidiaries of the Chinese central government.

Uncovered by the Chamber of Digital Commerce (an American non-profit advocacy group), their contents shed light on Beijing's mounting efforts to digitise the renminbi, which has sparked alarm in the West and spurred central bankers around the world to begin exploring similar projects. Some commentators have said that the U.S., which has no current plans to issue a government-backed digital currency, risks falling behind China and risking its dominance in the global financial system. Victor Shih, a China expert and professor at the University of California San Diego, said that merely introducing a digital currency "doesn't solve the problem that some people holding renminbi offshore will want to sell that renminbi and exchange it for the dollar", as the dollar is considered to be a safer asset. Eswar Prasad, an economics professor at Cornell University, said that the digital renminbi "will hardly put a dent in the dollar's status as the dominant global reserve currency" due to the United States' "economic dominance, deep and liquid capital markets, and still-robust institutional framework". The U.S. dollar's share as a reserve currency is above 60%, while that of the renminbi is about 2%.

In April 2020, The Guardian reported that the digital currency e-RMB had been adopted into multiple cities' monetary systems and "some government employees and public servants receive their salaries in the digital currency from May. The Guardian quoted a China Daily report which stated "A sovereign digital currency provides a functional alternative to the dollar settlement system and blunts the impact of any sanctions or threats of exclusion both at a country and company level. It may also facilitate integration into globally traded currency markets with a reduced risk of politically inspired disruption." There were talks of testing out the digital renminbi in the Beijing Winter Olympics in 2022, but China's overall timetable for rolling out the digital currency was unclear.