Central bank digital currencies (CBDCs): the design framework and implementation model of China's digital yuan (e-CNY) and comparison with digital euro

Kok Lian Woo and Alexandre Hervé

Chapter 18 in Research Handbook on FinTech, 2026, pp 318-338 from Edward Elgar Publishing

Abstract: This chapter provides a comprehensive analysis of Central Bank Digital Currencies (CBDCs), focusing on the design and implementation of China's digital yuan (e-CNY) and comparing it with the digital euro. It explores the motivations behind the e-CNY, such as the integration of fragmented payment systems, the need for alternative retail payment methods, and enhancing financial inclusion in rural areas. The paper highlights the e-CNY's two-tier system, its account-based structure, and its pilot tests across multiple Chinese cities. The digital euro's design framework, legislative challenges, and future implementation plans are also discussed. Both CBDCs face common challenges such as consumer adoption, privacy concerns, cybersecurity risks, and cross-border payment complexities. This study contributes to the understanding of CBDCs’ potential in improving financial efficiency and inclusion, while also addressing the regulatory and technological hurdles they must overcome for widespread adoption.

Keywords: Central Bank Digital Currency; CBDC; Digital yuan; E-CNY; Digital euro; Financial inclusion; Cross-border payments; Monetary policy (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035321414
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