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To answer key questions about China’s forthcoming digital currency, the Digital Currency Electronic Payment (DCEP) or “digital yuan.”

Discusses prospective legal standards and guidelines; expected features compared with traditional payment methods and other digital currencies; how DCEP works; status of pilot programs; use of DCEP for cross-border payments; transparency, data protection and cybersecurity issues; and key implications for foreign businesses and financial institutions in China.

When DCEP is officially launched in China, there is little doubt that the population can easily adapt to its use. The launch of DCEP can have significant ramifications on a global scale, as it could reduce China’s reliance on the SWIFT system for international banking and offers the first glimpse of the internationalization of the renminbi (RMB).

Foreign companies operating in China, hi-tech businesses, retailers, financial institutions, and mobile app developers need to track the development and acceptance of DCEP, monitor arising risks, assess how their financial products fit, and adjust business operations, reporting requirements and financial reserves related to the requirements and use of DCEP, expected growth in fintech surrounding digital currencies.

Practical advice from experienced mergers and acquisitions, private equity, strategic investment and capital markets lawyers.

Purpose: This chapter aims to lay out the issues regarding the world of digital currencies, private and central bank digital currency (CBDC). In that connection, the authors want to, as much as possible, systematically present the terminology, examples of various digital currencies and the technology behind that phenomenon. The chapter also highlights the occurrence of CBDC and the possible implications of its introduction to day-to-day commercial banking practice, possibly taking the payment systems and transactions alternation, balance sheet and profits’ issues into consideration.

Need for the study: Digital currencies already have and are also soon going to have an enormous impact on society as such, where payments for everyday goods and services are taken on a whole new platform and level, in the sense of how the payments are made and payment systems are constructed, as also in the sense of quantity, as the number and sum-wise payments carried out via such platforms are growing.

Methodology: A triangulation method, a mixed qualitative methodological approach was implemented, so the research offers a synthesis of previously published contributions in this field, followed by deductive and inductive reasoning interconnected with descriptive and comparative analyses.

Findings: As digital currency already have a vast impact on payment systems and modes of payment, the CBDC, an imperative of today and not the matter of the future, will have implications for commercial banks, probably in the field of lowering banks’ commissions, no big customer data-selling ability, accumulating the deposits and deposit policies and credit policies due to higher funding costs for banks. There is an interwovenness among the central bank activities, bank customer’s behaviour and commercial bank activities. Therefore, the change of payment and spending behaviour of customers because of central banks’ introducing novelties will also have consequences for the banking industry.

Practical implications: The choice to handle cash or digital currency will be obsolete, and an individual’s or a firm’s financial knowledge must be upgraded in the field of new money using angles. The issue of digital currencies and CBDCs are no longer a matter of choice but are becoming a new reality. Therefore, it is necessary for the common public, economy and banking system, especially now carrying out most of payments and transfers of money, to study this field and foresee the possible consequences and risks emerging.

This paper outlines the rapid rise of China's fintech companies over the past decade with a focus on their globalization strategies as they enter their next phase of development.

The author examines China's current and prospective influence on global financial digitization trends, and assesses both domestic and foreign opportunities and challenges confronted by China's fintech firms as they look to expand abroad.

The Chinese government is experimenting with a radically new fintech system and a regulatory regime in response to it. Chinese ambitions to expand fintech influence through private companies and the state-led “digital RMB” (e-CNY) will likely provoke a wave of “digital protectionism” among developed nations to protect internal digital payments.

This paper is an original economic history research on China's fintech industry.

The authors investigate household acceptance of central bank digital currencies (CBDCs) by drawing on the unified theory of acceptance and use of technology and institutional trust theory.

The authors build a research model including six hypotheses and quantitatively analyze it using partial least squares structural equation modeling (PLS-SEM) and importance–performance map analysis (IPMA) based on 282 answers to a survey questionnaire.

The continuous adoption of CBDCs by households is highly probable and is fostered by its expected high performance, the social recommendations and the existence of facilitating conditions. Nevertheless, institutions' efforts to propose a flexible and understandable currency can benefit its adoption only if these institutions also strive to build households' trust in the currency's system.

The authors provide a full review of the emerging literature on CBDCs and suggest that digital currency offerings can be divided into centralized, semi-centralized and de-centralized control in a meaningful taxonomy. The authors also complement extant studies on CBDCs that mostly apprehend its operational challenges by focusing on the customer side and provide implications to the launching of CBDCs by uncovering the customer-specific determinants of their adoption.