China’s National Digital Currency DCEP / CBDC Overview

What is DCEP?

China’s national digital currency DCEP (Digital Currency Electronic Payment, DC/EP) will be built with Blockchain and Cryptographic technology. This revolutionary cryptocurrency could become the world’s first Central Bank Digital Currency (CBDC) as it is issued by the state bank People’s Bank of China (PBoC). The goal and objectives of the currency are to increase the circulation of the RMB and its international reach – with eventual hopes that the RMB will a global currency like the US Dollar. China has recently established an initiative to push forward Blockchain adoption, with the goal of beating competitors like Facebook Libra – a currency that Facebook CEO Mark Zuckerberg claims will become the next big FinTech innovation. China has made explicit that Facebook Libra poses a threat to the sovereignty of China, insisting that digital currencies should only be issued by governments and central banks. DCEP is not listed on cryptocurrency exchanges and will not be for speculation of value.

DCEP: Will China DOMINATE digital currencies?
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Why is China coming up with a digital currency?

The significance of DCEP is that it’s designed as a replacement for the Reserve Money (M0) system, cutting back the cost and friction of bank transfers. It is suggested that DCEP will alleviate the risks of offline paper money transactions such as anonymous counterfeiting, money laundering and illegal financing. This is because regulators can better monitor digital currency transactions, which some consider will greatly improve financial and monetary supervision. DCEP can also reduce the costs involved in maintaining and recycling banknotes and coins.

Basically, DCEP is poised to become a digital version of the RMB.

Furthermore, the issuance of DCEP is conducive to promoting the internationalization of the RMB and reshaping the current cross-border payment system. This is because prior to the RMB Cross-Border Inter-Bank Payments System (CIPS) going live in early October 2015, RMB cross-border clearing and settlement was mainly done through CHIPS (Clearing House Interbank Payments System) or SWIFT (Society for Worldwide Interbank Financial Telecommunication). However, some consider that both the CHIPS and SWIFT systems have fatal flaws. Firstly, CHIPS is a US company. Whilst SWIFT, in particular, is seen as a cause for concern to the Chinese because due to its foothold in the international banking system, it is almost essential to use SWIFT for inter-bank transfers across countries. Thus whoever controls SWIFT’s data center will have access to information on almost every cross-border remittance, which some in China posit is the US. This is because whilst SWIFT claims to be a neutral international organization, 12 of the 25 directors are either from the US and her allies. Also, its transactional data were found to have been supplied to the US. Hence it is thought that China is being held back by the US via the SWIFT system, and so, in internationalizing the RMB- China requires its own worldwide banking system- i.e. DCEP.

Hence the Chinese consider that it is a requirement to form a new currency clearing network.

According to Chinese media, DCEP is seen as the “3rd Wave” aimed at the US.

A mandate to adopt Blockchain

China has established a countrywide initiative to push forward Blockchain Adoption. President Xi Jinping has mandated that the ‘country’s development of blockchain technology should be sped up ‘ on Oct 24th in front of the Political Bureau. This speech has also been echoed by Li Wei, head of the People’s Bank of China. In April of 2020, China launched the Blockchain Service Network to unify all the Blockchain related projects in the Nation.

China has adopted the “Blockchain, not Cryptocurrency”, whereby the benefits of Blockchain is highlighted. On the other hand, cryptocurrencies that are native to Blockchain are suppressed as Cryptocurrency Exchanges and ICOs are banned in the country.

History and development of DCEP

Development of DCEP started in 2014 with the establishment of a research institute dedicated to digital currencies and looking at how to improve the Chinese Yuan system with blockchain technology. However during 2014 to 2018, the development process slowed down, probably because the decentralised nature of Bitcoin or blockchain is incompatible with the nature of the Renminbi as a legal national currency. Things rapidly picked up towards the end of 2019 however and this was directly attributable to Facebook preparing to launch Libra, particularly as partner members of the Libra Association and the currencies which Libra was to be backed by had consciously rejected China. Hence, feeling the heat of the competition, China’s central bank felt immense pressure to urgently speed up in the global competition towards a digital currency.

Former Vice-chair of the PBoC’s National Council for Social Security Fund announced on 22nd June 2020 that China had already completed the backend infrastructure of DCEP.

Uses for DCEP

DCEP is a currency created and sanctioned by the Chinese Government. It is not a 3rd party stable coin such as Tether’s cryptocurrency token “CNHT” which is also pegged to the RMB in a 1:1 ratio. DCEP is the only legal digital currency in China (cryptocurrencies such as Bitcoin are not legal tender in China).

Huang Qifan (Chairman of the China International Economic Exchange Center) said they have been working on DCEP for five to six years now and is fully confident it can be introduced as the country’s financial system. It’s currently being rolled out, with the People’s Bank of China issuing the currency. According to a speech by Huang at the China Finance 40 Forum, “DCEP can achieve real-time collection of data related to money creation, bookkeeping, etc, providing useful reference for the provision of money and the implementation of monetary policies.”

DCEP is not for speculation

China has made it explicitly clear that its National Digital Currency is not for speculation. Mu Changchun, Head of the People’s Bank of China digital currency institute made it as “a digital form of the yuan” and that “The currency is not for speculation. It is different to Bitcoin or stable tokens”. This is to the disappointment of the online community in China, where some netizens commented “So there will be no fun in it” on

It is also not possible to mine DCEP or stake on the DCEP network.

Cross-border payments with DCEP?

Cross-border payments with m-CBDC Bridge

China has joined forces to explore cross-border payments for digital currencies alongside Hong Kong, Thailand, the United Arab Emirates (UAE), and the Bank of International Settlements (BIS). 

According to a joint statement in February 2021, the People’s Bank of China and the UAE’s central bank are taking part in the Multiple Central Bank Digital Currency (m-CBDC) Bridge project initiated by the Hong Kong Monetary Authority and Bank of Thailand in 2019. 

The m-CBDC Bridge project will explore the capabilities of distributed ledger technology, through the development of a proof-of-concept prototype. The project ultimately aims to facilitate cross-border, multi-currency, real-time transactions around the clock. 

This move aligns with China’s long-term ambition to use DCEP to boost the use of RMB in international payments. While the project is currently an alliance between just Beijing, Hong Kong, Bangkok, and Abu Dhabi, it is strongly supported by the BIS, an organisation owned by 63 central banks.

The announcement also comes mere weeks after China’s joint venture with SWIFT, the dominant network facilitating international payments between banks. The new entity, Finance Gateway Information Service, was registered in Beijing on January 16 with €10 million (US$12 million) as incorporation capital, according to the National Enterprise Credit Information Publicity System, the Chinese government’s enterprise credit information agency.

Cross-border technical testing with Hong Kong

In April 2021, the People’s Bank of China said it had begun technical testing with the Hong Kong Monetary Authority for cross-border use of DCEP. 

Hong Kong is a major offshore trading centre for RMB and a jumping off point from which China can advance its goals to internationalise RMB. 

Xing Yujing, president of the People’s Bank of China’s Shenzhen branch, proposed establishing a controlled environment known as a “regulatory sandbox” to test DCEP and push greater capital account convertibility between Shenzhen and Hong Kong. “We can explore allowing market entities with strong cross-border financial demand and risk control capability to use digital RMB in a convertibility pilot,” she said in an interview with Outlook Weekly, a publication under the official Xinhua News Agency. 

Although capital flows would see tight control by the Chinese authorities, a supervised environment in which financial institutions and fintech companies can use to experiment with innovative products could create an “expressway of cross-border financial innovation” between the two cities.

Special features of DCEP

DCEP is a Centralized Currency

DCEP is a digital currency that is run on a centralized private network – the Central Bank of China has complete access and control of the currency. This is a huge contrast to Bitcoin, which has an open decentralized network where there is no centralized leader. In the case with DCEP, the Central bank of China has the ability to create or destroy DCEP.

NFC Contact based payment

According to Official Sina Blockchain, DCEP will have NFC based payment options that don’t require devices to be online during the transfer. This will be poised as a direct replacement of paper money, as DCEP will be usable in areas without internet coverage. In addition, DCEP doesn’t require the mobile device to be bound to a bank account – meaning the unbanked population will also have access to the digital currency.

With DCEP’s tap payment feature people can transfer money simply by tapping two phones together, without the use of the Internet. So DCEP is not exactly like blockchain either, rather it is their own variant.

China Construction Bank launches DCEP wallet

On 29th August 2020, China Construction Bank (CCB) had a soft launch of the DCEP wallet. Users of one of China’s big four state-owned commercial banks found a DCEP wallet feature was available inside their mobile app. Users were even able to navigate to the digital yuan wallet and activate it through registering their mobile phone numbers.

Obviously, news of this spread like wildfire amongst the Chinese cryptocurrency community and social media. Some users were even reportedly able to make small transactions by linking their CCB accounts with the DCEP wallet. According to the below images that were being circulated, it appeared that upon activating the wallet, users would be assigned a specific wallet ID for transacting between the wallet and their bank accounts (left image). The main interface (center image) also shows several features such as deposits/withdraws, viewing detailed transaction info, connecting your bank account with the DCEP wallet, ability to “gift” red packets, repayment of credit cards, upgrading and canceling the DCEP wallet. The right image also shows the ability to pay/receive/transfer funds with a simple click, or to be able to scan another users’ wallet. The “red packet” function is also interesting, as it takes a page out of WeChat’s popular red packet feature which allows people to gift a sum of money to others. Only the recipient sees the amount gifted when they “open” the packet. This feature is incredibly popular during Chinese New Year, where managers or bosses would shower virtual red packets all over their company’s WeChat chat group for employees to excitedly collect.

Finally, users can send/receive the digital currency to others by inputting their unique wallet ID or the phone number associated with the bank account.

CCB DCEP wallet
CCB DCEP wallet

However, CCB has disabled the DCEP wallet feature from public access, but not before it gained huge attention. Users searching for this wallet now will only get a error message saying that the function is not yet officially available to the public.

Tencent to be a major partner of DCEP

Tencent’s Meituan Dianping has been in talks with the research wing of the PBoC on real world uses for DCEP. Meituan Dianping boasts billions of dollars in daily transactions on their mobile app platform offering services such as food delivery (similar to UberEats), B&B bookings (similar to AirBnb), ride hailing services, bike sharing, grocery shopping and more. Basically for those in China, all your daily necessities can be met on the Meituan ecosystem.

The PBoC’s research wing is also in talks with another Tencent-backed company, Bilibili Inc. which provides video streaming services. So whilst the specifics of the partnership are yet to be finalised, it is likely that such cooperation is going to be huge for the mass use of DCEP in China.

These companies are joining existing giants such as Didi Chuxing, a ride hailing app which merged with Uber China back in 2016 and also has millions of dollars worth in daily transactions.

Meituan ecosystem
Meituan ecosystem (Image credits: GGVCAPITAL)

What is the difference between DCEP, Libra, Bitcoin and Cash? A comparison

Here’s a comparison of the different features between DCEP, Libra, Bitcoin and Cash:

Anonymous?Can be made anonymousYesYesYes
Type of blockchain technology used?Smart contract, asymmetric cryptography etc.Consortium blockchainPublic blockchainNil
Offline payment support?YesNoNoYes
Transaction speed (TPS/sec)?220,0001,0007N/A
Status?Undergoing testingIn developmentIn circulationIn circulation

For more details, check out our article on DCEP, Libra, Bitcoin and Cash compared.

DCEP testing

How will DCEP be tested?

On 17th August 2020, CCTV 2, China’s national television confirmed that DCEP will first undergo pilot testing in what they call the “4+1 method”. That is, there would first be closed pilot tests in the major cities of Shenzhen, Chengdu, Suzhou, Xiong’an and some locations where the 2022 Winter Olympics would be held.

Which Chinese merchants already support DCEP payments?

More than 10,000 merchants have participated in the DCEP testing. Notably, the following major online retailers already have support for China’s digital currency: (China’s largest e-commerce platform), Didi (ride-hailing service), Meituan
(food delivery services), Bilibili (video streaming platform).

Foreign firms like McDonalds, Starbucks will also test DCEP

Along with some local hotels, unmanned supermarkets, postal lockers, bakeries, bookstores, and gyms, foreign firms such as Starbucks, McDonald’s, and Subway have been announced as companies that will participate in testing of DCEP.

China’s CCTV have confirmed that in Xiong’an, McDonalds and 19 other companies have already started testing DCEP.

RMB 30mil in DCEP given to select Shenzhen residents

Shenzhen first gave locals RMB 10mil (US$1.47 million) in DCEP via a lottery on 11th October 2020. A total of 50,000 digital “red packets” each containing RMB 200 (US$30) were given to residents who had registered for this lottery on the iShenzhen, a blockchain-based public services app operated by the Shenzhen Government.

The lucky winners were able to spend their DCEP at 3,389 designated shops in Luohu from 12th to 18th October 2020.

The lottery attracted nearly 2 million Shenzhen residents (15% of the population) to sign up. This is the first time the PBoC has included the general public in testing.

On 11th January 2021, Shenzhen did a second DCEP airdrop, this time giving out RMB 20 million worth of DCEP for public testing.

Meanwhile, we can already see that China is paving the road to accept DCEP. From Chinese social media, we can already see that DCEP is going to be generally referred to as “E-CNY” or 数字人民币 (Translation: Digital RMB). The Shenzhen metro ticket machines already have enabled the feature for topping up metro cards with DCEP, and some commercial premises have “DCEP accepted here” signs.

Beijing tests DCEP-cash ATMs

State-owned banks have introduced the feature to deposit and withdraw DCEP at more than 3,000 ATM locations in Beijing. Residents of the capital city will now be able to exchange DCEP for cash and vice versa. 

According to a report by Xinhua Finance on June 18th 2021, the service has already been enabled on more than 3,000 ATMs operated by the Industrial and Commerce Bank of China (ICBC), making it the first banking institution in China to launch a DCEP-cash conversion system. The move makes it easy for users to switch between digital and non-digital forms of government-issued currency, bringing the nation one step closer to releasing a digital currency built on a blockchain network.

The report also noted that the Agricultural Bank of China has installed a similar feature on more than 10 of its ATMs in Beijing’s Wangfujing area, a popular shopping district in the Chinese capital.

hardware wallets in Beijing come in the form of cards
Hardware wallets in the form of cards

Another new feature being tested in Beijing is the option to make transactions using hardware wallets in the form of a card. The China Economy Daily reports that the Postal Savings Bank of China debuted hardware wallets that will be especially useful to bridge the divide for elderly citizens and others who may not be savvy with mobile phones or applications. There is even an advanced version that only allows transactions upon verifying the fingerprint of the card owner. 

DCEP wage payments

China’s Xiong’an New Area has started using DCEP to pay the wages of some workers. The district, located around 60 miles south of Beijing, has served as a testing ground for new economic ideas. 

In a statement in June 2021, the Xiong’an government described the DCEP pilot as the country’s first “on-chain” payment used for builders’ wages, using the Blockchain Fund Payment platform to pay wages.

Hong Kong will participate in cross-border DCEP testing

On 4th December 2020, the Hong Kong Monetary Authority (HKMA) confirmed it is working with the Digital Currency Institute of the People’s Bank of China on technical pilot testing of DCEP for cross-boarder payments. Currently, preliminary technical preparations for such testing are underway. The HKMA is optimistic about the use of DCEP for cross-border payments, since the RMB is already in use in Hong Kong and the huge popularity of cross-border tourism between China and Hong Kong.

e-CNY wallet becomes top downloaded app in China

After its launch in early January 2022, the e-CNY wallet, which is used to store and spend DCEP, becomes the most downloaded mobile app. Whilst Alipay and WeChat pay will support DCEP, the e-CNY wallet as the dedicated and official DCEP app has the potential to become a formidable rival with its discounts and red packets.

The e-CNY app currently only operates in 12 select cities such as Shanghai, Beijing, and Shenzhen, unlike Alipay and WeChat pay, which can be used across China.

DCEP (e-CNY) test sites to be expanded in the remainder of 2022

According to an announcement by Lan Zou, head of monetary policy at the PBoC, the number of DCEP test sites in China will be expanded from 11 to 23 in the remainder of 2022. Furthermore, in reviewing the status of DCEP testing so far, Zou has stated that they were “spectacularly successful” and that it was “demonstrated to be an invaluable tool in improving quality of life, stimulating consumption, growing internal demand and ensuring steady economic development…”

Based on the latest data, over 4,567,000 merchants across China have begun accepting DCEP. For example in Guangzhou, citizens can use e-CNY to pay their employee housing fund contributions. The Chinese government has also partnered with Meituan and, a food delivery service and e-commerce platform to create e-CNY airdrops. Data shows that as of 20th June 2022, over 6 million unique users have made orders on Meituan. also states that since accepting e-CNY payments, they have processed over 4 million transactions worth approximately 900 million CNY (US$131.6 million).

Citizens can now use DCEP (e-CNY) to pay for public transport

China has recently rolled out a new round of DCEP testing by letting citizens use e-CNY to pay for bus or subway rides. This feature is currently available in 9 Chinese cities, including Guangzhou and Ningbo. Citizens will need to download and deposit funds onto the e-CNY app, and then scan the QR code at the station for payment.

Deployment and Distribution

According to Caijing magazine, the pilot institutions for DCEP will be the 4 major state-owned banks i.e. China Construction Bank, the Agricultural Bank of China, Bank of China and the Industrial and Commercial Bank of China. This initial deployment will serve as an official production test for the currency system, where the network and security will be validated. In the second phase, DCEP will be distributed to large fintech companies such as Tencent and Alibaba to be used in WeChat Pay and AliPay respectively.

DCEP will operate on a two-tiered system

The issuance and distribution of DCEP will be based on a two-tiered system.

The first tier would be transactions between the PBoC and intermediaries. These intermediaries would be financial institutions (e.g. the 4 major state-owned banks i.e. China Construction Bank, the Agricultural Bank of China, Bank of China and the Industrial and Commercial Bank of China) and non-financial institutions such as Alibaba, Tencent and UnionPay. Here, the PBoC would issue DCEP to the intermediaries.

The second tier would be between the above-mentioned intermediaries and participants in the retail market such as companies (e.g. retail stores) and individuals like you and I. In this tier, the intermediaries that have received DCEP will distribute it to the retail participants so that it would circulate through the market e.g. through people buying things at stores etc.

The main difference in the issuance and distribution of DCEP compared to traditional cash however is the fact that DCEP would be transferred through electronic wallets, rather than bank accounts.

DCEP two-tiered system
DCEP would operate on a two-tiered system (Image credit:

China has completed the backend infrastructure for DCEP

China has already completed the backend infrastructure of DCEP, as well as the setting of parameters, research and development into its functions, joint debugging testing etc. although ongoing testing is still required. According to netizens that obtained screenshots from the closed beta, the DCEP wallet will support several major functions including: digital asset exchange, wallet management, ability to look up past transactions. Other functions include payment via QR code, remittances and mobile payments.

Images of DCEP Wallet and integration into Alipay and Bank of China App (source: Twitter Matthew Graham)

Other pictures circulating online appear to be of the Bank of China’s DCEP wallet. As can be seen from the image, the wallet will allow the currency to be sent, received, converted etc., as well as a simple and clear interface showing the user’s transaction history.

BOC DCEP wallet
BOC DCEP wallet

Merchants must accept DCEP

The central government has mandated that all merchants who accepted digital payments (such as Apple Pay, AliPay and WeChat) pay must accept DCEP. This will give DCEP a large nation wide acceptance in China, with every merchant obligated to participate or face a potential loss of their business license. This will make DCEP the most accepted digital currency in the world.

Huawei Pay to Support DCEP

At a press conference on 30th October 2020, Huawei, with its close ties with the Chinese Government has announced its Huawei Mate40 is the first smartphone that will enable a hardware wallet for DCEP. Huawei has also confirmed on social media platform Weibo that it will have the capability of initiating transactions even in offline situations. On Huawei’s heels, rival company Tencent has also stated they will support DCEP on the WeChat pay platform.

DCEP scams

Mere hours after DCEP has been announced, various (potentially scam) Chinese exchanges have listed IOUs or knock-offs clones of DCEP. It’s important to know that DCEP is currently only distributed to banks working with the PBoC and will not be available for the public. If you want to find out what are reputable exchanges, check out our top cryptocurrency exchanges guide. It is strongly recommended NOT to trade DCEP until it is officially released as there is no guarantee exchanges have access to the digital currency.

Knock-off clones of DCEP are already trading in (potentially) scam exchanges.

How to buy DCEP?

Currently DCEP is only available to other banks working with the People’s Bank of China. This will eventually open up to the general public in 2020. There are currently no cryptocurrency exchanges that trade DCEP.

When will DCEP be officially launched?

There is still no specific timetable for the formal debut of DCEP. Although for now some experts have revealed to China Daily, a news outlet in China that before DCEP is officially launched, there may still need to be adjustments to the initial plans since the situation is much more “complicated”. The experts also reveal that it is unclear whether DCEP can debut in the second half of 2020, although plans for its development have certainly been ramped up by the PBoC.

Implications of DCEP?

Is DCEP a challenge to the US monetary system?

The overwhelming view appears to be yes, both from the Chinese and the US perspective. According to statistics from the World Bank, 1.7 billion adults around the world use cash because they don’t have bank accounts. However, two-thirds of this population own a mobile phone, which can be used to make monetary transactions. This is what’s been happening in China, where mobile payments such as Alipay or WeChat Pay have more than 1.7 billion customers across China. Currently, the two online payment companies handle more payments monthly than Paypal did in the whole of 2017 (i.e. USD $451 billion). It’s very common in China to see street vendors accepting Alipay or WeChat pay.

Alipay and WeChat being accepted at an ATV rental shop

With the mobile wallet payment infrastructure in place, their cooperation with the PBoC could be the answer to distributing DCEP overseas. This would fit China’s “Belt and Road Initiative”, the aim of which is to build a new trade route connecting Asia with Europe and Africa. The idea is that with DCEP being used by mobile wallets, populations along the Belt and Road can be connected, bypassing existing financial infrastructures completely and giving an opportunity for the unbanked to pay for online purchases and build their savings.

In the US, the government does not see a demand for digital currencies. In a letter from the Chairman of the Federal Reserve, Jerome Powell, he took the view that many of the challenges a digital currency intends to solve do not apply to the US. In his view, the US payments landscape is already highly competitive and innovative, with plenty of digital payments options for consumers. Powell also commented, echoing the sentiments of those US lawmakers opposing Libra, that a digital payment where you would know and be able to track each and every payment would be unattractive for the US.

Whilst the House Committee on Financial Services also sees Libra as potentially raising national security concerns, observers consider the challenge from China is not being taken seriously. Because on the other hand, China is worried that Libra will reinforce the dominance of the US Dollar and is therefore working on fast-tracking the launch of DCEP. And it is likely that China will outrun the threat from Libra.

From a wider perspective, some take the view that DCEP can be used as a weapon against the US in an economic war. This is because as DCEP becomes accepted across the Belt and Road, China will have the power of total surveillance and control over the economic activity of potentially half the world’s population. DCEP will allow China to track everyone’s spending and transactions, and can seize or lock customers’ digital assets in their mobile wallets. We’ve already seen this in China, where together with its “social credit system”, millions of individuals have already been barred from purchasing airline tickets using their mobile wallets.

Appearance on Chinese television debate show “Tiger Talk”

On 29th August 2020, I appeared on China’s Phoenix Television show “Tiger Talk” (一虎一席談). Tiger Talk is one of Phoenix TV’s longest-running shows, each week they feature a debate on a major societal issue or event, and would invite experts, academics and guests to participate in the discussion. I was invited by Phoenix Television as an overseas analyst to discuss the topic of the week, namely, “DC/EP: China’s release of digital currency, will it shake the US Dollar’s hegemony?”. You can watch the episode here.

Boxmining Tiger Talk
Guest appearance on Tiger Talk

Implications of DCEP on Bitcoin and cryptocurrencies

In the first instance, it should always be borne in mind that DCEP and Bitcoin/cryptocurrencies are vastly different. Key differences are that DCEP does not necessarily use blockchain technology and that it is a centralised currency under the control of a centralised authority. Learn more about the differences between DCEP, Libra, Bitcoin and Cash.

However, the large scale promotion of DCEP on national television in August 2020 is certainly bracing and preparing Chinese citizens for a digital version of the RMB. The gradual rollout of DCEP will also get the average citizen accustomed to the actual usage of digital currencies.

As a result, many people are excitedly speculating on the possibility of a bridge between DCEP and various existing blockchain projects- with some projects proclaiming they will be the first project to launch on DCEP. However it must be borne in mind that we do not know the full technical details of DCEP, so we do not know how this bridge between blockchain and DCEP will work, if at all. Also, the fact is that China is currently very hostile towards cryptocurrencies, this is mostly due to a number of cryptocurrency scams- such as Plus Token. As a result, the Chinese government have closed several bank accounts found to be involved in cryptocurrency transfers and banned all ICOs, several major cryptocurrency exchanges such as Binance and OKEx and some Over the Counter desks. Hence a lot of cryptocurrency circles and discussions occur underground, such as in private WeChat groups.

In a confusing twist, however, the CCP’s official media outlets 参考消息, Xinhua and CCTV have been pushing out headlines that crypto assets are the best performing asset year to date. Dovey Wan, Founding Partner of Primitive Ventures has observed that the real intent behind this media push is difficult to interpret, but so far the Chinese cryptocurrency community see this as a signal that crypto has reached its top. Meanwhile, on the Western front on Twitter, people have been seeing this as a bull signal. Currently, without any further moves or news in China about DCEP or on the cryptocurrency front, we can only wait and see what China’s next move will be.

Will DeFi push governments to finally adopt CBDCs?

Decentralised Finance (DeFi) can be considered the cryptocurrency and blockchain star of 2020, having revived the cryptocurrency market and bringing some much-needed revival and positivity. But what is DeFi? In short, DeFi attempts to bring traditional banking to developing industries, but with a twist: it would be open-source, decentralised, cheap and will cut out the middlemen.

So what can central banks and government do to maintain their dominant status quo whilst benefitting from the technology that DeFi can bring? An answer could be to create a CBDC. In a Forbes article, the author suggests that CBDC would be a positive move for governments since it tokenises money whilst allowing users to enjoy the advantages of cheaper, faster transactions.

The article also touches upon our coverage of DCEP and discusses China’s progress in testing DCEP contrasted with the progress of introducing a CBDC in the US. It suggests that governments and institutions, however, will need to be quick to catch up as new DeFi solutions in payments, mortgage, insurance etc. are being created weekly, and this legion of fintech innovators are growing. These innovators challenge the status quo, and with the mounting advantages of DeFi, there may soon be a real contender vying for the attention of citizen-consumers.


Is DCEP backed by Gold?

The simple answer is u0022Nou0022. On a recent episode of Kitco News, journalist Max Kaiser claimed that China will launch a gold-backed cryptocurrency, with the intention of destroying the USD as a reserve currency. He added that China has already amassed as much as 20,000 tons of gold. However this is mere speculation – China has no plans to return to the Gold Standard nor issue gold-backed cryptocurrencies.

Will DCEP be interoperable with other Cryptocurrencies

There are many plans to build gateways that allow the swapping of DCEP to other cryptocurrencies. Projects such as Algorand have stated they want to support DCEP and build possible bridges to swap these currencies. However, as the technical details of DCEP have not been fully revealed, such bridges have not been built yet.

Who can issue e-CNY?

There are 7 Chinese commercial banks that can provide e-CNY. They are: ICBC, Agricultural Bank of China, Postal Savings Bank of China China Construction Bank, Bank of China, Bank of Communications, and China Merchant’s Bank. There are also 2 online banks that can provide e-CNY i.e. WeBank (WeChat Pay) and MyBank (Alipay).

Which Chinese Cities can sign up and use the e-CNY app?

Currently, there are 12 cities and areas in China which can sign up and use the e-CNY app. They are Shenzhen, Suzhou, Beijing Xiong’an, Chengdu, Shanghai, Hainan, Xi’an, Changsha, Dalian, Qingdao, and Zhangjiakou.

Can tourists or non- Chinese locals use DCEP?

No, DCEP is not fully rolled out yet and is only available in select cities in China.


The information provided in this article is intended for general guidance and information purposes only. Contents of this article are under no circumstances intended to be considered as investment, business, legal or tax advice. We do not accept any responsibility for individual decisions made based on this article and we strongly encourage you to do your own research before taking any action. Although best efforts are made to ensure that all information provided herein is accurate and up to date, omissions, errors, or mistakes may occur. 
Disclosure: Authors are invested in cryptocurrency projects and have cryptocurrency holdings - including those covered on this website. 

I’m Michael Gu, Creator of Boxmining. I’ve been involved in the digital asset and Blockchain space since 2012. Something I immediately noticed was that accurate information is hard to come by in this space. More often than not, we find extremely biased information that exploits the complexity of blockchain to obscure facts. Having been around before bitcoin or blockchain was even “cool” meant that I had to do a lot of discovery myself, and along the way, I had many successes, but also made mistakes. I started Boxmining in 2017 mainly as a passion project, to educate people on digital assets and share my experiences. Being based in Asia, I also found a huge discrepancy between digital asset trends and knowledge gap in the West and China. So I leveraged my knowledge and positioning to bridge that information gap and let people know what is truly happening. This journey has been nothing short of exhilarating for me, starting from when I mined Bitcoin in grad school to appearing on China’s national television as an overseas expert on blockchain technology, and having the honour of interviewing leading crypto entrepreneurs, including Binance CEO Changpeng Zhao and FTX founder Sam Bankman-Fried.


  1. Hi Michael, thanks for this information, really interesting. I was curious about the NFC contact-based payments and how it will work. From my understanding, iPhones probably will not allow the peer-to-peer communications. How will these devices be included? Perhaps QR-based transfers that are already common?

  2. This may force US government to pass Facebook Libra to counter / compete otherwise they may left behind again :).

  3. It meant to escalate us dollars in certain places at certain circumstances. Like small trade in Africa. Be careful

  4. Hi Michael,
    This DCEP seems to be a game changer for the financial world. I understand that an algorithm has to be solved by special computers called miners and a bitcoin is rewarded to the miner that solved the algorithm. I presume that the blockchain developed by the Chinese Central Bank needs an algorithm to be solved before a transaction can be included into the blockchain. Does that mean only the Chinese Central Bank’s computers will solve the algorithm?

  5. wow great article. this is what people want to know and NEED to know. The crypto coin that will ultimately become a global dominant player will likely be the one simply based on sheer numbers of global adoption.

    No the US will not act by creating their own crypto. It goes against the very fabric of a central bank, large corps connected to banks and not wanting to let go of their firm grip on consumer behaviour. Instead they’ll do what they always do. Try to dehumanize the Chinese. And provoke to go to war.

    Thankfully, China will not really care about the US. They will go ahead as planned. And yes, USA will/and already has, got left behind.

  6. It’s a perfect model for a totalitarian regime. They can shut off any wallet they want when they don’t like something . Yet the people in power can use it internationally and bypass SWIFT . Great for the people in power. Shit for Chinese citizens .

  7. DCEP is undergoing testing in China. There’s no official launch date. No you cannot mine it or buy it, it is a digital version of their national currency.

  8. Hi Michael,
    I met with someone who is from Hong Kong. And he claims it is possible to buy the coin and invest in cbdc from What do you recommend ? Should I open an account from this webpage and invest in digital currency? Is this possible to invest via company id on this page ? I could not understand the coins on this page. What is the relationship between cbdc and this currencies


  9. Hi Michael,
    I met with someone who is from China. And he claims it is possible to buy the coin and invest in cbdc from What do you recommend ? Should I open an account from this webpage and invest in digital currency? Is this possible to invest via company id on this page ? I could not understand the coins on this page. What is the relationship between cbdc and this currencies


  10. I register on their platform, invested on the platfrom and when it was time for me to withdraw fund they refuse. they kept my withdraw pending for month until now, i try to contact them they said i needed to send some documentatons which i need and i never heared from the again. They are scamer please do not invest on their site. They accept payment but do not allow you with draw,

  11. Great information!!! Well explained. Is this available as a ‘white paper’ pdf? I’d like something that is easier to print off.

  12. Investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the future. Must read about the latest investment, since I started trading with investor_shatha @ hotmail. com I have been making money every week, they help me to invest my 5000 dollars on digital cryptocurrency exchange and every week I earn about 35000 dollars or more then, they are the best and legitimate investment company, you could invest your money and get good payout profit, the good thing is that you can start investing from 500 dollar, An investment in knowledge pays the best interest hurry now and invest, email, or WhatsApp, +421919050127

  13. I bought $400 of dcep from above site, but now the site is unavailable so I would say I have been scammed

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