E-CNY and Digital Economy in China

Abstract

This paper highlights the inescapable trend of digital currency growth by examining past currency patterns, and explores the ties between digital currency and the digital economy. With the case of China, this paper forecasts the future improvement pattern of digital money. In the midst of the fast growth of private cryptocurrencies, China developed the digital currency with the goal of serving the digital economy and committing to the globalization of the digital renminbi and the digital economy. While Europe and the United States were experiencing continued stagnation in 2022, China has entered the cycle of loose monetary and fiscal policy. China views digital fiat money and digital economic development as a breakthrough to drive the transformation of the current economic system, new inventive growth, and the safety of the whole supply chain in the context of the scissors gap. It has become one of the forefront countries in the digital field, with numerous experiences that can be learned by countries around the world. This paper also creates the concept and calculation formula of the e-CNY Index, sets the year 2022 as the first year of the e-CNY with the initial value of the index at 100; it also gives suggestions for creating and calculating the China-style Digital Economy Index. The importance of these indices as new tools for tracking and evaluating the digital macroeconomy in China is presented, providing a promising direction for future in-depth research on digital fiat currency.