China's digital yuan is about tracing and economic power

A sculpture depicting the Chinese yuan and abacus in Guangzhou in China's Guangdong province. An official Chinese digital yuan is now in pilot runs to slowly start replacing the physical legal tender. If the experiment succeeds, it will become the wo
A sculpture depicting the Chinese yuan and abacus in Guangzhou in China's Guangdong province. An official Chinese digital yuan is now in pilot runs to slowly start replacing the physical legal tender. If the experiment succeeds, it will become the world's first sovereign token to reside exclusively in the ether. PHOTO: EPA-EFE

The coronavirus has disrupted the world in very large ways. While that battle has been waged, however, another event has almost been missed: the birth of a new kind of fiat currency, which could forever reshape the relationship between money, economic power and geopolitical clout.

An official Chinese digital yuan, more than five years in the making, is now in pilot runs to slowly start replacing the physical legal tender.

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A version of this article appeared in the print edition of The Straits Times on May 25, 2020, with the headline China's digital yuan is about tracing and economic power. Subscribe