Digital Yuan (or Digital RMB) is a form of digital currency based on the Chinese yuan. The development of the digital yuan was first announced by China’s central bank, the People’s Bank of China, in 2014. It is seen as part of a larger effort to modernize and digitize its economy.
Like other forms of cryptocurrency such as Bitcoin or Ethereum, transactions involving the digital yuan are recorded on an immutable blockchain-based ledger that makes them virtually impossible to tamper with or reverse without authorization from all parties involved in any given transaction. This allows users to send money securely and quickly throughout China and beyond while eliminating risks associated with paper currency like counterfeiting or fraud.
Unlike cryptocurrencies like Bitcoin which rely on decentralized networks for processing payments, however, the digital yuan will be centrally managed by Chinese banks who will act as intermediaries between buyers and sellers during transactions using this new type of electronic payment system. This means that it has certain features similar to traditional fiat currencies but also comes with some additional benefits due to its underlying technology such as increased efficiency when making global transfers compared to traditional banking methods used today
