China's Currency Digitalization: Assessing Its Impact on the International Economic Landscape

This thesis examines the emergence and implications of central bank digital currencies (CBDCs), focusing on China’s digital renminbi initiative. The study analyzes CBDCs’ foundations, design models, and implementation challenges, offering insights into their transformative potential for global monetary systems. It explores the advantages of CBDCs, such as enhanced financial inclusion, increased payment system resilience, and new monetary policy tools, while addressing associated risks like disintermediation, privacy concerns, and systemic instability. The core of the thesis focuses on the digital renminbi, tracing its evolution within China’s highly digitized economic and financial ecosystem. By leveraging the widespread adoption of digital payment platforms like WeChat Pay and Alipay, the e-CNY represents a significant step in China’s monetary digitalization. Key features, including a two-tier distribution system, programmability, and offline transaction capabilities, position the e-CNY as an innovative model that balances user privacy with regulatory oversight. Its introduction reflects strategic goals aligned with China’s broader economic and geopolitical ambitions. The international dimension of the digital yuan is explored through its potential impact on advanced and developing economies. The thesis includes case studies on the European Union and India, analyzing how the digital renminbi influences their trade dynamics and digital currency initiatives.