On 14 October, the Australian Strategic Policy Institute published this Policy Brief saying that China’s central bank digital currency, known as ‘DC/EP’ (Digital Currency / Electronic Payment), is rapidly progressing and, if successful, would have major international implications that have not yet been widely considered by policymakers. DC/EP would have ramifications for governments, investors, and companies, including China’s own tech champions. The article notes that a survey published by the Bank for International Settlements in January 2020 found that, out of 66 central banks, 80% were engaged in the research, experimentation or development of a CBDC. The brief is organised as follows –
- Section 1 is a general overview of digital currencies;
- Section 2 focuses on the policy drivers behind DC/EP;
- Section 3 examines DC/EP’s architecture based on patents in order to assess the surveillance capabilities it would embed;
- Section 4 describes the institutional ecosystem behind DC/EP;
- Section 5 looks at how DC/EP would affect domestic digital payment systems Alipay and WeChat pay; and
- Section 6 looks at the implications DC/EP could have for global financial governance.
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