Running silently beneath the outcry over TikTok and We- Chat is the advancement in the development of China’s sovereign digital currency —  the Digital Currency Electronic Payment or DCEP.

The structure of this is described as “one currency, two addresses, three centres”. “One currency” refers to DCEP itself. “Two addresses” refers to the data centres run by the People’s Bank of China (PBoC) and the commercial banks. They are connected with DCEP’s central blockchain ledger. The currency is distributed to these addresses and then to the broader economy. The “three centres” are the newly created Registration Centre, Circulation Centre and Big Data Analytics Centre. The Registration Centre applies “know-your-customer” rules to new users and issues credentials based on individual profiles. The Circulation Centre records the issuance, transfer and settlement of all transactions while the Analytics Centre focuses on risk management and will include both money laundering and anti-corruption measures.

Unlike Bitcoin and other private currencies, DCEP is legal tender. US President Donald Trump’s weaponisation of the Society for Worldwide Interbank Financial Telecommunications (SWIFT) settlement system for dollar transactions and international transfers has accelerated the rollout of the DCEP.

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