Digital RMB: A Possible Way to Reassert Data Control in the Digital Economy

CIGI Policy Brief No. 169

November 29, 2021

As the first digital currency piloted by a major economy, China’s digital renminbi (RMB) has drawn worldwide attention. Many observers, however, have exaggerated the digital currency’s influence on RMB internationalization; others have focused on its potential replacement of the current third-party payment system, or the possibility that the digital RMB could be exploited to strengthen China’s authoritarian regime by way of monitoring everyday transactions conducted by Chinese citizens. However, these observations have missed the main point of the digital RMB as a key fintech innovation in the age of the digital economy. It could be an important tool in assisting China’s central bank to reassert control over big data in the financial system and to bring the rapidly growing power of Chinese fintech giants under control. Its issuance also acts as a pre-emptive measure that positions the People’s Bank of China to compete with other central bank digital currencies and cryptocurrencies.

About the Author

Xingqiang (Alex) He is a CIGI research fellow. Alex is an expert on China and global economic governance, the Group of Twenty, domestic politics in China and their role in China’s foreign economic policy making, and Canada-China economic relations.