DCEP is the Chinese version of Central Bank Digital Currency (CBDC). It is the only legal digital currency in China and meets four conditions: (a) it is issued by the central bank; (b) it is digitized; (c) it is account and wallet based; (d) it is oriented towards the general public. As a retail central bank digital currency, it has three main technical features: a “tiered limit arrangement” (small-scale payments can be made anonymously while largescale payments cannot), a “two-tier operating system” (as with the central bank-commercial bank traditional model), and a “dual offline payment system” (supporting both parties of the transaction). Compared with CBDCs in other countries, China’s DCEP has smaller economic impacts, more obscure strategic goals, and more scarce technical details. But its progress in testing is ahead of central banks of other countries. This article is based on public information and is intended to explain what DCEP is and why and how it was developed. It also offers suggestions for future research.



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