In 2021, the Chinese authorities may introduce a digital version of the yuan into mass circulation within the country.

In the future, the electronic currency of the PRC can compete with the dollar in international payments.

This is the conclusion reached by analysts of the Danish investment bank Saxo Bank.

“The stability of the Chinese currency and the inherent traceability and controllability of blockchain technology will virtually eliminate the risk of capital outflows and illegal withdrawals from the country.

This idea works well with China's double-circulation strategy, as it increases transparency in domestic transactions and encourages the use of the renminbi in foreign ones, making it a tempting alternative to the dollar, ”the Saxo Bank report said.

According to the organization, in 2019 the share of non-cash payments in China reached 80%.

Against this backdrop, in October 2020, the Asian republic conducted a pilot test of the digital yuan.

According to Aleksey Maslov, Acting Director of the Institute for Far Eastern Studies of the Russian Academy of Sciences, the experiment confirmed the technical readiness of the PRC to introduce an electronic means of payment.

Moreover, at the moment, a clearinghouse for operations with digital yuan has already appeared in the country.

“China has issued about 10 million yuan in digital currency.

The first recipients of electronic money were identified using a lottery, and they received the funds to special accounts.

With the help of e-yuan, the Chinese were able to buy real goods.

It turned out that people really want to participate in the calculations in this way and they have the technical ability for this, ”Maslov said.

The main difference between the new means of payment and cryptocurrencies is the presence of a single issuer in the person of the People's Bank of China.

Alexey Kiriyenko, managing partner of EXANTE, told RT about this.

“First of all, China needs the digital yuan to create an alternative to cryptocurrencies.

In particular, bitcoin, according to the country's authorities, can be used for money laundering and other illegal operations.

It is possible that elements of the cryptocurrency ecosystem will be used in the digital yuan, but the system will be completely transparent and controlled by the state, ”the analyst explained.

However, the new means of payment will still have some positive properties of the cryptocurrency.

According to Dmitry Volkov, CTO of the international crypto exchange CEX.IO, transfers of digital yuan will become easier and cheaper, and the electronic currency itself will be impossible to counterfeit.

According to Aleksey Kiriyenko, in 2021, the Chinese authorities will continue to experiment with digital currency in certain regions of the country, and the financial authorities will need additional time to fully launch the means of payment.

At the same time, Dmitry Volkov allows for a faster spread of the electronic yuan.

“The Agricultural Bank of China has joined testing digital money.

Moreover, the People's Bank of China has already included the digital yuan in the latest banking legislation.

Therefore, we can expect a wider means of payment by the end of 2021, ”the expert suggested.

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According to Saxo Bank experts, the introduction of digital currency will allow the Chinese authorities to open the country's financial market to foreigners.

This, in turn, will provide an opportunity to increase the use of the yuan in international trade and investment.

As Alexey Maslov said, today only foreigners permanently residing in the country can work in the Chinese financial market without restrictions.

In addition, overseas owners of Chinese companies have access to operations.

“Investors who only have a representative office in the People's Republic have limited access to Chinese assets.

In some cases, they receive income from securities at a lower interest rate than local companies and individuals.

Many consider this to be a violation of economic and trade rights.

One of the options for solving the problem is just the opening of trades when using digital currency, ”added Maslov.

According to the expert, in the future, China will promote the electronic analogue of the yuan as a means for international payments.

First of all, the Asian republic can launch loans in digital currency for the implementation of projects under the "One Belt - One Road" program.

“At first, the countries of South-East Asia and partially the countries of Central and Eastern Europe can switch to payments in digital yuan.

If China successfully introduces digital currency into circulation, this can significantly reduce the share of the dollar in international settlements.

We will immediately get a 15% decrease in the prevalence of the dollar, ”Maslov concluded.