PBOC provides details on how China’s new digital currency will work

China’s central bank has released further details of its forthcoming digital currency — including the news that citizens will be able to use it to exchange money and make payments in an NFC-like manner.

People's Bank of China logo“The new DC/EP currency is a digital currency and electronic payment tool. Its functional attributes are exactly the same as paper money, but it is just a digital form. We define it as a digital payment tool with value characteristics,” Mu Changchun, director of the People’s Bank of China’s Digital Currency Research Institute, has revealed.

Transactions made using the digital currency will maintain the anonymity and main value characteristics of cash, he explained, and will not be tied to a bank account.

It will also be distributed in the same way as bank notes are distributed today. “Commercial banks open accounts at the central bank, paying 100% of the total amount, and individuals and businesses will open digital wallets through commercial banks or commercial organizations.”

Citizens will then be able to make payments by installing a DC/EP wallet on their mobile phone and transferring funds into their digital currency account. No network connection is needed for a transaction to be made and “as long as the two mobile phones touch each other, the transfer function can be realized.”

“Traditional electronic payment is useless in an environment where there is no signal, and DC/EP does not require a network to pay, so it is also called ‘double offline payment’,” he added.