Unlike cryptocurrencies like bitcoin, the digital yuan will not use blockchain, distributed ledger technology which allows transactions to be validated without the need for banks.
Widespread use of the digital yuan would give Chinese policy makers greater visibility into how money flows around China’s economy.
This would help them track any illicit flows of funds, such as money laundering or terrorist financing, and it would also allow them to experiment by targeting monetary policy interventions on specific economic classes, regions or other groups.
In extreme economic circumstances, it would also allow them to have negative interest rates for cash.
China has a long-standing aim of internationalising its currency, and in time, the digital yuan may help with this initiative, making it easier to encourage users in other countries to use the yuan.Article:
Explainer: How does China's digital yuan work?Perhaps many people have heard or heard of China's e-CNY as it is expected to be the world's first recognized and adopted CBDC. A number of other CBDCs were used before, but China was the first country to have CBDCs become a national strategy with full roadmap from trial, expansion, verification and full integration into the national payment system.
However for now, as far as I can see, it has subordinated the expectations of all crypto community.
We used to expect that CBDC would exist as stable coins USDT, USDC, PAX ... and help connect the traditional economy with the crypto economy like USDT did. But e-CNY doesn't even work on blockchain, without a decentralized ledger, it's adopted as a regular digital in AliPay, ApplePay, and SamsungPay payment apps. It only becomes a tool for the Chinese government to increase the degree of economy control and manipulation. It goes against the goal of Bitcoin & crypto. It is just a way for the Chinese government to defuse people's demands on crypto. They create something akin to crypto, they swap concepts, and at the same time increase the degree of economymanipulation .
In the future, will other countries study China to launch digital money similar to China's e-CNY? The CBDC wave is expected to explode in 2021 but we haven't seen any signs of it right now, and I don't expect it to either. We need the true cryptocurrencies instead of an imposter & spy.