CHINA VOICES | DCEP class is in session, with Zhou Xiaochuan

A recently published speech by Zhou Xiaochuan, who spearheaded China’s foray into digital currencies when he was chairman of the People’s Bank of China (PBOC), has shaken some basic assumptions about the digital yuan, or e-CNY.

China has been working on a digital currency for years, much anticipated by fans of virtual payments and opponents of leather wallets. It’s likely to be the first major economy to adopt a digital currency. Details were scarce until April 2020, when a series of four pilot programs gave us our first look at e-CNY payments. 

Just in time for the annual meeting of China’s legislature, its most famous monetary policy authority has released the text of a talk on the central bank’s digital currency plans. Zhou said that these plans are a lot broader than the launch of a new form of currency.

We recommend reading the whole Chinese Caixin text, even if it means using Google Translate—it’s a lot easier to follow than the translation. We're relying on Caixin's English where available, and our own translation where not.

First off, Zhou’s first point: “DCEP”—short for “digital currency/electronic payments” is not the same as the digital RMB. Many writers—us very much included—have understood them to be near identical.

According to Zhou, this is a misunderstanding. The currency is called the digital yuan, or e-CNY. DCEP is the central bank’s broader research project into digital currencies and electronic payments. 

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