China needs to spearhead an aggressive campaign to emerge as the pioneering country in virtual money as part of its efforts to internationalize the yuan and wean itself off the U.S. dollar payment infrastructure, according to a commentary released by the People's Bank of China.
The prerogative to issue and regulate an electronic currency will become a "new battlefield" between sovereign nations, according to a China Finance report. China Finance is a magazine run by the PBOC.
The report said 130 patent applications linked to a digital yuan had been filed with the central bank's research institute as of April.
Among the advantages of the electronic currency - technically referred to as Digital Currency Electric Payment, or DCEP - is the reduction of the U.S. currency's influence in international finance.
China has a significant edge in - and opportunities to - developing its own fiat virtual currencies "so it should accelerate the momentum to seize the first track," according to the report, a portion of which was quoted by Reuters.
Another advantage of a digital yuan payment system would be an efficient response to payments data and processing - which might help improve the promotion of monetary policy. China has been developing its electronic currency over the past six years and is currently testing it with large banks and companies.
Meanwhile, as China prepares to introduce a digital yuan, JD.com Inc. - one of the largest e-commerce companies in the country - has joined with the PBOC to promote the payments system, the online payments, commerce and financial technology news site PYMNTS reported.
JD Digital Technology and the Digital Currency Research Institute will advance the development of mobile and Blockchain applications that are in line with the central bank's proposed digital currency, they said. JD and the PBOC will collaborate on the conception of digital wallets that support the country's electronic cash system.