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Introduction The robust development of network technology and digital economy call for retail payment services that are more convenient, safe, inclusive and privacy-friendly. In many countries and regions, central banks or monetary authorities have kept a close eye on Fintech development and sought to digitalize fiat currency, putting theory into practice.

The People's Bank of China (PBOC) attaches great importance to the research and development of digital fiat currency. In 2014, it set up a task force to study digital fiat currency, and its scope of research covered the issuance framework, key technologies, issuance and circulation environment, and international experience. In 2016, the PBOC established its Digital Currency Institute, which developed the first-generation prototype of digital fiat currency. At end-2017, upon the approval of the State Council, the PBOC began to work with commercial institutions in developing and testing digital fiat currency (hereinafter referred to as e-CNY, a provisional abbreviation following international practices). So far, as the top-level design, function development, and system testing has been basically completed, the PBOC has initiated pilot programs in some representative regions, while making sure the pilots run in a steady, safe, managed, innovative and practical manner.

The PBOC working group on e-CNY research and development hereby releases this white paper to clarify the PBOC's position, to explain the background, objectives and visions, design framework and policy considerations for the e-CNY system, to seek public comments, as well as to deepen communication with all those concerned and join hands with them in building an open, inclusive, inter-operable and innovative currency service system for the era of digital economy.

1. Background of research and development

1.1 The development of digital economy calls for new retail payment infrastructures that are safe, inclusive and adaptive to the digital era.

Currently, as the Chinese economy is shifting from high-speed growth to high-quality development, technological innovation represented by the digital economy has become an important driver of development. With the rapid development of digital technologies such as big data, cloud computing, artificial intelligence, blockchain and the Internet of Things, the digital economy has witnessed various new models and new businesses. Covid-19 has sped up digital transformation of people’s work and life, and online shopping, remote working and e-learning have become more active. The digital economy has expanded in its geographic coverage, and the less developed and remote areas have witnessed a rising demand for online financial services.

In recent years, the rapid development of electronic payment, especially mobile