Knowledge Base: Digital Currency Research Institute (数字货币研究所) of the People’s Bank of China


March 8, 2022

Article Banner Picture


March 8, 2022

The People's Bank of China (PBOC)'s Digital Currency Research Institute (数字货币研究所, shùzì huòbì yánjiūsuǒ) is a research team within China's central bank dedicated in part to launching the digital yuan—China’s central bank digital currency (CBDC), also known as the e-CNY and formerly known as the “digital currency/electronic payments” (DCEP) project. It was established in 2016 and is one of the most important sources of insight on the PBOC's efforts to become the first major central bank to issue a digital fiat currency. In 2017, the State Council approved a plan for the PBOC to develop the digital yuan in collaboration with major banks.

The Digital Currency Research Institute is currently headed by Mu Changchun (穆长春, Mù Chángchūn), a veteran bank regulator with experience working abroad for the African Development Bank. The institute's early efforts were evidently focused on distributed ledger blockchain: It filed more than 60 patents related to blockchain in its first year. Since then regulators have moved away from a blockchain-based digital currency in favor of a centralized operational model. In 2021, the Institute's deputy head, Di Gang, reportedly said it had developed a blockchain-based distributed ledger for e-CNY, but a number of technical challenges prevented broader scalability. 

The Digital Currency Research Institute has directed much of its work toward raising China’s profile as a global trendsetter for CBDC. In March 2021, Mu proposed a set of principles for CBDCs to “avoid dollarization.” Mu reportedly said the goal of the digital yuan was to “safeguard monetary sovereignty” and “to improve transparency with cross-border e-commerce and to address the regulatory pain points in AML [anti-money laundering] and CFT [combating financing of terrorism], customs and tax declarations, capital management, etc.” The institute has since published a set of proposals for CBDC governance, which includes standards for interoperability, sovereign discretion, and regulatory compliance.

Selected reference materials:

China’s Digital Currency: Adding Financial Data to Digital Authoritarianism, Yaya J. Fanusie and Emily Jin, January 2021 

China, the United States, and the Central Bank Digital Currencies: How Important Is It to Be First? Martin Chorzempa, March 2021

Multi-CBDC arrangements and the future of cross-border payments, Bank for International Settlements, March 2021

Introduction to the special issue on digital currency, Yang Ji & Yan Shen, January 2021

The flipside of China’s central bank digital currency, Australian Strategic Policy Institute, October 2020  

Cryptocurrencies, China’s sovereign digital currency (DCEP) and the US dollar system, Michael Peters, Benjamin Green, and Haiyang Yang, August 2020 

The central bank is conducting digital currency research and development experiments, SINA Finance, January 2019

Central Bank Digital Currency and the Future of Monetary Policy, National Bureau of Economic Research, August 2017

A Global Look at Central Bank Digital Currencies: From Iteration to Implementation, The Block, August 2020 

China: DC/EP, CBDC Tracker



MARCH 8, 2022

Let’s Start With What China’s Digital Currency is Not