This report explains China’s domestic and international ambitions in developing a central bank digital currency (CBDC), reviews the main technical framework of Digital Currency/ Electronic Payment (DCEP) and discusses how the People’s Bank of China (PBOC) and private firms are working to implement it and how this currency project adds to the Chinese Communist Party's (CCP’s) authoritarian toolkit.

Key recommendations:

• Mount a diplomacy campaign urging Chinese government transparency and restraint in using DCEP for punitive measures.
• Monitor risks from DCEP data collection on U.S. persons.
• Prioritize CBDC developments within the U.S. national security apparatus.
• Assess the U.S. private sector’s ties to China’s digital financial authoritarianism.