Digital Yuan Wallet Apps: China recently released pilot versions of its digital yuan wallet application on mobile phone app stores as the country's central bank steps up its push to develop its own digital currency.

Key Details:

• They are now available in Android and Apple stores.
• The wallet app for the digital Yuan, also known as e-CNY, can now be downloaded from the iOS and Android app stores in the country.
• The "e-CNY (Pilot Version)" app was developed by the People’s Bank of China’s (PBOC) digital currency research institute.
• Previously, the wallet app was only downloadable via private links.
• The app is free to use.
• The app was first launched in 2019.
• The number of users using the app has increased to 10 million.

About Digital Yuan:

• Digital Yuan - official name — the Digital Currency Electronic Payment (DCEP) is the digital currency of China which was launched in 2014.
• It’s effectively a way for the central bank to digitalize bank notes and coins in circulation.

Why is it being introduced?

• According to Fan Yifei, deputy governor of the PBOC, digital Yuan is being introduced by China as cash and coins are not easy to use, they’re easy to counterfeit and because of their anonymity, could be used for illicit purposes.
• CBDC (central bank digital currency) could make payments more efficient and improve the transmission of monetary policy.
• Also, to increase competition in the payments space and reduce systemic risk.

Is Digital Yuan a Cryptocurrency?

• No, Digital Yuan is not a crypto currency.
• It is meant to be a replacement for traditional money.
• It is controlled by the Central Bank of China.
• It's not decentralized and doesn't operate on the blockchain. 
• The Government of China has plans to launch the currency internationally at Winter Olympics 2022.
• It is equal in value to fiat currency (Paper currency).

Difference between Digital Yuan and Bitcoin:

• Bitcoin is a so-called decentralized cryptocurrency which means that it is not controlled by any central authority like a central bank while the digital yuan is issued by the PBOC.
• Bitcoin is controlled by the market while Digital Yuan is completely controlled by the Central Bank.
• Bitcoin is built on a technology known as blockchain while it is not clear at present of what kind of technology is used in the digital Yuan.

 How does Digital Yuan work?

• There are two aspects in the working of the Digital Yuan.
  • Firstly, distribution
  • Secondly, how it will be spent.
• Distribution will be conducted via a so-called two-tier system which means that the digital Yuan is distributed by the central bank of China to the commercial banks.
• The commercial banks will then for providing the digital currency to the consumers.
• The consumers can exchange their coins and cash for digital yuan.
• People have to use a mobile application called the Digital Yuan Wallet Apps  to receive digital Yuan.