THE People's Bank of China (PBOC) has reportedly begun a pilot test of the digital yuan in April, thus becoming the first major economy to introduce a central bank digital currency (CBDC). The experimental trials started in three cities - Shenzhen, Suzhou and Chengdu - as well as in the Xiong'an New Area, and digital yuan has become part of the monetary system.

Together with President Xi Jinping's recent appeal for greater urgency in the development of blockchain, the pilot launch of digital yuan epitomises China's ambition to become the digital currency leader. Moreover, state-media outlet China Daily claimed that "[CHINA'S]digital currency provides a functional alternative to the dollar settlement system".

While China is the only major economy that has made a daring step towards a major milestone, governments and central banks around the world have been experimenting with blockchain and digital currencies for years. The early versions of the US stimulus bill included the development of a digital US dollar, while the European Central Bank recently released a working paper analysing the merits of its potential digital currency.