It seems that 2020 can bring us the breakthrough, and the first CBDC can go live. Where else than in the e-commerce king of the world, in China. As the Chinese DECP (Digital Currency/Electronic Payments) initiative is almost 5 years old, even the completely state-governed financial system has (or had) many issues regarding the development of this huge project.
After postponing the implementation for many times, in May at many Chinese metropolis, like in Shenzhen and some parts of Bejing (where the 2022 Winter Olympics would take place) the E-Yuan is now ready to use.
Right now only some companies and users can access the system but its already working. I have to tell you that a country wide implementation or a user base increase is not even mentioned anywhere yet. Their hidden goal is probably to break the dollars hegemony in the worlds economy with this disruptive digital innovation.
On the contrary, one of the biggest country in the world is doing no less than issuing a government supervised and controlled digital currency which is exactly the opposite of the reason why the first cryptocurrency, Bitcoin was created. Some judge the E-yuan as it is another milestone for China to give the government bigger control with extending the Social Credit System even more.
As the technical information about the currency is a well protected secret we do know that its based on some kind of Blockchain technology but in a really centralized way as the whole ledger is only available for the Chinese Central Bank. So its almost like printing paper money in a digital way. But this centralization would radically help to speed up and scale the system to be as seamless as possible.
There are two main reason why the E-yuan could be a huge success. First, as Tencent and Alibaba two huge Chinese consortium already has a well developed digital payment system which process billions of transactions every day the government sometimes need to warn companies to accept the cash as well. Thanks to WeChat Pay and Alipay the cashless, facial recognition based technology is part of the everyday life of China so there will not be any issue accepting the use of E-yuan.
The other reason why e-yuan can be accepted in many places are thanks to the government bans on other cryptocurrencies. In 2017, they banned the exchange of yuan to any cryptocurrency and after that they banned the mining too. They said these things are big risks for the economy while, the real reason is that cryptocurrencies would have been a way for people to sneak past the centralized control of China.
Chinese officials say that the biggest risk for e-yuan is the Libra project developed by Facebook, but as the regulators in the US are slowing down that development process, e-yuan can have a huge impact on the world.
An anonim economist, who worked on the development of e-yuan said: "This is an electronic money with Chinese characteristics." As the plans set the expectations really high the complete digital transformation in the payments industry is years away even in China. Their realistic goal is the have 10% of total transaction made on the e-yuan ecosystem in the upcoming years.