China's Strategy on Digital Yuan in the post COVID-19

Abstract

Digitalization will be an inevitable trend in the post-COVID period. Accordingly, China's grand strategy has clearly targeted at the digital economy and digital currency. This article reviews the development path of the Chinese currency, Renminbi (RMB), which is gradually changing according to China’s development strategies in different periods and contexts. Currently, in the Xi Jinping era, China has become the first country to issue a digital currency, known as “the Digital Yuan”, in order to accelerate the digital transformation in the post-COVID-19 period and also to reduce its dependence on the global dollar payment system.

This article highlights six key features of the digital yuan that will be used in the country with the most netizens in the world. It is likely that the digital yuan will be widely used both in business and by Chinese people as most of them have been increasingly familiar with a cashless society in China. Importantly, the digital yuan could significantly change the financial system in many ways, by making transactions easier, more convenient, more transparent and cutting transaction costs. 

In the end of this article, the author analyzes China's strategic goals to achieve the RMB internationalization strategy and also the impact of the digital yuan on the global financial system and on the future of Thailand-China economic relations in the short and long term.