China's sovereign digital currency plans must be globally compatible to internationalise the yuan, analysts say

Karen Yeung karen.yeung@scmp.com

September 1, 2020, 2:30 pm

China is set to expand the testing of its new sovereign digital currency later this year or in early 2021, but analysts say the design of its technological platform needs to be made compatible with those of other countries if the digital yuan is to play a role in international transactions.

China's sovereign digital currency testing plan comes amid a sense of urgency to promote greater use of the yuan as the threat of United States sanctions has sparked fears that Chinese financial institutions, in an extreme case, could be cut off from access to the US dollar payment system.