China is about to launch a state-of-the-art digital payment system called DCEP - and the so-called new power in the world of cryptocurrency.
Many people say that one day everyone in the world will use this DCEP.
Cryptocurrency is a type of digital currency that can be created and used outside the control of the government or the central bank.
Many people know about the digital currency called Bitcoin.
It started in 2014 from a secret place in western China, created by a Chinese entrepreneur named Chandler Guo.
He thought that Bitcoin would one day change the world, replace the dollar and become the main currency of the world.
How is digital currency made?
It takes a lot of computers to make bitcoin, so it costs a lot of electricity. Chandler Guo used a hydroelectric plant for this purpose, and his partner was a local Chinese government official.
The machines were capable of producing 30 percent of all bitcoin in the world - called mining.
But Bitcoin maker Chandler Guo is now seeing the rise of a new force.
That is a digital payment system made by the Chinese state.
Large-scale cryptocurrency mining requires extensive computing capabilities
Its name is Digital Currency Electronic Payment or DCEP. That is to say, it is a digital version of the Chinese currency, the yuan.
Mr. Guo says - this DCEP will one day become the world's leading currency.
"One day everyone in the world will use DCEP," he says.
Why, how will DCEP be successful?
Mr Guo says it will be successful because many Chinese now live outside of China. According to one estimate, 39 million Chinese now live abroad.
"If these people have contact with China, they will use this DCEP, and that will turn this currency into an international currency."
But many are questioning how successful it will actually be, and there is another concern that China might use it to monitor the country's citizens.
How does this DCEP work?
DCEP uses a technology similar to Bitcoin - called blockchain.
It is a type of digital ledger that is used to verify transactions.
Blockchain keeps a record of all transactions made on that network, and users also play a role in verifying new transactions.
A bitcoin shop in Istanbul, Turkey
This means that if users want to pay each other over their phones - they don't have to go to the bank.
DCEP is being launched at the end of this year?
China plans to launch DCEP later this year. But China's central bank has not yet announced a specific date.
Earlier this year, digital currency trials began in selected cities in China.
When fully activated, users will be able to attach a downloaded electronic wallet to their bank card, which will allow them to transact and transfer money.
China's central bank is now under pressure to speed up the process of launching this digital currency. Because they want China Facebook's Libra to become the world's leading digital currency - says Linghao Bao, an analyst at Trivium, a Beijing-based company.
They think it will be worse than the US-controlled economy, he said. Bao.
China wants to compete with the dollar
Observers say China wants to turn the yuan into an international currency - so that it can compete with the dollar.
Many people think that cryptocurrency is the future of money
"The United States has built the current global economy and the tools to run it. China thinks that if some other countries use the Chinese currency, they can break US dominance," said a Chinese cryptocurrency observer named "Bitful" (he declined to be named).
He thinks cryptocurrency is the future of money.
And according to some other observers, China is already far ahead of the United States in this fight for future control.
China's digital payment system is now considered to be the most advanced in the world. The country is now on the verge of becoming a 'cashless society'.
Last year, four out of every five transactions in China in 2019 were through WeChat-Pay or Alibaba's Alipay.
What is Facebook doing?
Facebook has now made many cuts to their digital currency Libra plans.
However, they plan to launch an e-wallet called Novi by the end of this year - which may also be available on Messenger and WhatsApp.
China and Facebook have a bitter rivalry with Libra, thinks Linhao Bao.
One difference, however, is that DCEP is state-controlled, and Bitcoin or Ethereum is out of state control - it's not centralized and it's not outside the economy.
That's why Stuart McKenzie, a cryptocurrency expert in Hong Kong, says DCEP is the opposite of bitcoin. Because the ultimate goal of cryptocurrency is to separate money from the state. "
"That's why I trust Bitcoin more," Bitful said. Because it's mine. "
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