Central Bank Digital Currency as an Implementation of Distributed Ledger Technology: Digital Yuan Case Study

The study aims to analyze the Central Bank Digital Currency project on the example of the Digital Yuan. In the first part of the work, using the example of other countries, the main reasons for starting work on a digital fiat currency were indicated. The most important ones are: the digital transformation of societies and the departure from paper money, combating the effects of a financial collapse (hyperinflation), striving to make safe financial transfers and fighting the coronavirus pandemic as an indirect, secondary one. Taking the case study of China, the second part of the work analyzes the opportunities and threats that may potentially result from the implementation of the vision of the digital currency of the central bank. The digitization of societies seems to be inevitable, therefore it is necessary to consider in which direction the further development of CBDC may go? Two different scenarios seem natural. The first, dominant one, indicates that digital currencies are intended to complement traditional payment methods. The second, on the other hand, assumes that cash will be withdrawn by the central bank, and citizens will only use digital virtual currency.