eRMB – Digital Yuan, the digital currency yuan, the digital name of Chinese currency. China has launched the trial of their digital yuan as specific services in major urban centers. The major cities of Shenzhen, Suzhou and Chengdu, as well as the Xiong’an New Area, will witness use of digital currency for some services. It is expected that these areas will have considerable transactions as the overall population is more than 38 million.
The currency will be used to subsidize transport in Suzhou and in Xiong’an on food and retail.
The People’s Bank of China (PBOC) said that the digital currency – known as the e-RMB – “will not be issued in large amounts” for public use in the short term, and that the digital currency in circulation would “not lead to an inflation surge”.
The PBOC, the country’s central bank, will be the sole issuer of the digital yuan, initially offering the digital money to commercial banks and other operators. The public would be able to convert money in their bank accounts to the digital version and make deposits via electronic wallets only.
The central bank digital currency will be the electronic form of the renminbi, with value equivalent to the paper notes and coins in circulation. The technology will be based on the core block chain technology, the digital currency could change the financial system in big ways — by cutting costs and making transactions easier, more convenient and more transparent.
Unlike decentralized cryptocurrencies, such as bitcoin, that allow users to transfer value with no central authority or third party involved, the government-backed digital currency is put under the centralized mechanism of the central bank and thus is as stable in value as its cash cousin as reported by ET.