CBDC News

A Riddle, Wrapped in a Mystery, Inside an Enigma – the Future of the eCNY

The leader of China’s Digital Currency Research Institute has obliquely hinted that the eCNY may evolve to involve fractional banking, becoming a tokenised deposit solution anchored by a wholesale CBDC. This would address the issue of having to 100% back CBDCs and allow interest to be earned on holdings.

At the same time, the People’s Bank of China (PBOC) has opened a digital yuan (e-CNY) international operations centre in Shanghai that it wants to become a CBDC and digital payments hub, facilitating the development of the digital yuan, cross- border payments, and investment.

The goal is to globalise and expand China’s CBDC operations by establishing three platforms, including a cross-border digital payments platform that will utilise the e-CNY, a blockchain service platform, and a digital asset platform.