FILE: Beijing, China - Date Unknown (CCTV - No access Chinese mainland)
1. People's Bank of China headquarters

FILE: China - Date Unknown (CGTN - No access Chinese mainland)
2. Various of bank clerks working, counting yuan banknotes
3. Man facing desktop
4. Bitcoin signs

Beijing, China - Recent (CCTV - No access Chinese mainland)
5. SOUNDBITE (Chinese) Dong Ximiao, research fellow, National Institution for Finance and Development:
"The digital currency issued by the central bank is legal tender. That means it has the same power as cash. Many people call the Bitcoin and the Libra that Facebook is about to launch 'digital currencies,' which is inaccurate. The Bitcoin and the Libra are virtual currency, basically virtual commodity. As they do not have state credit endorsement, they are not legal tenders recognized by law."

FILE: Beijing, China - Date Unknown (CCTV - No access Chinese mainland)
6. Sign reading "The People's Bank of China"

FILE: China - Date Unknown (CCTV - No access Chinese mainland)
7. Various of Bitcoin sign

Beijing, China - Recent (CCTV - No access Chinese mainland)
8. SOUNDBITE (Chinese) Xu Yuan, senior researcher, Digital Finance Research Center,
Peking University (partially overlaid with shots 9-10):
"The Bitcoin is not a currency. Its value is very volatile. As we can see, the price of Bitcoin has dropped from over 20,000 to around 3,000 U.S. dollars. With such instability in value, it can hardly qualify for currency."

FILE: China - Date Unknown (CCTV - No access Chinese mainland)
++SHOTS OVERLAYING SOUNDBITE++
9. Man facing laptop
10. Bitcoin sign
++SHOTS OVERLAYING SOUNDBITE++
11. Man facing computer
12. Various of clerks working in hall
13. Renminbi sign
14. Various of customers checking out in supermarket
15. Man making payment with mobile phone

Beijing, China - Recent (CCTV - No access Chinese mainland)
16. SOUNDBITE (Chinese) Dong Ximiao, research fellow, National Institution for Finance and Development:
"The digital currency can be conveniently used without the internet. Users can make transactions or payments by bringing two mobile phones with electronic wallets close to each other."

FILE: Beijing, China - Date Unknown (CCTV - No access Chinese mainland)
17. People's Bank of China headquarters

Beijing, China - Recent (CCTV - No access Chinese mainland)
18. Saleswoman introducing smart phone for customer
19. SOUNDBITE (Chinese) Xu Yuan, senior researcher, Digital Finance Research Center,
Peking University:
"New technologies can support micropayment (by the digital currency). The digital encryption technology can ensure the security of transactions."

FILE: China - Date Unknown (CCTV - No access Chinese mainland)
20. Various of people at bank counters
21. Various of renminbi paper notes going through counting machine
22. Sign reading "Currency Exchange"
23. Various of bank clerk counting renminbi paper notes
24. Bundles of renminbi paper notes; renminbi paper notes going through counting machine; bank clerk at table
25. SOUNDBITE (Chinese) Dong Ximiao, research fellow, National Institution for Finance and Development (starting with shot 21/partially overlaid with shots 26-29):
"On a national level, the central bank-backed digital currency can reduce the cost of issuance -- issuing paper cash and coins incur costs in printing, transportation and management. The usage of digital money can also reduce management costs for commercial banks."

FILE: China - Date Unknown (CCTV - No access Chinese mainland)
++SHOTS OVERLAYING SOUNDBITE++
26. Clerk working at desk
27. Various of Renminbi paper notes going through counting machine
28. People in bank hall
29. Clerk working at desk
++SHOTS OVERLAYING SOUNDBITE++
30. Various of pedestrians
31. Buildings, traffic at crossroads
32. City view

China has started testing its government-backed digital currency in some regions before introducing it to the public, according to the People's Bank of China, the country's central bank.

At present, the trials are being conducted in a closed environment and not connected to the existing sovereign currency issuance and circulation system. Pilot programs have been launched in cities of Shenzhen, Suzhou, Chengdu, as well as in the Xiong'an New Area, a new city being built south of Beijing. Some of the payment scenarios related to the Beijing 2022 Winter Olympics are also undergoing tests.

The PBOC started research on its digital legal tender in 2014. The State Council, the nation's cabinet, approved the PBOC's digital currency development program at the end of 2017, jointly with some qualified commercial banks and institutions. The central bank called the new money "digital currency and electronic payment," or DCEP.

Dong Ximiao, a research fellow with the National Institution for Finance and Development, said the DCEP is essentially digitalized renminbi, which is markedly different from the Bitcoin and Facebook-backed Libra that are virtual commodities.

"The digital currency issued by the central bank is legal tender. That means it has the same power as cash. Many people call the Bitcoin and the Libra that Facebook is about to launch 'digital currencies,' which is inaccurate. The Bitcoin and the Libra are virtual currency, basically virtual commodity. As they do not have state credit endorsement, they are not legal tenders recognized by law," he said.

State credit endorsement means the DCEP will have relatively stable currency value, according to Xu Yuan, a senior researcher with Peking University’s Digital Finance Research Center.

"The Bitcoin is not a currency. Its value is very volatile. As we can see, the price of Bitcoin has dropped from over 20,000 to around 3,000 U.S. dollars. With such instability in value, it can hardly qualify for currency," said Xu.

In terms of usage scenarios, the digital currency is designed to adopt the same exchange rate as physical money and be used for small amount retail payments. The public can transfer the money in their bank accounts to the digital version and deposit it in their "electronic wallets."

Different from popular payment apps such as Alipay and WeChat Pay that rely on the internet, the technology used by the PBOC allows the digital currency to be exchanged without the internet, just like using physical cash.

Payments via the upcoming Chinese sovereign digital currency could be contactless and the transaction can be achieved using the nearfield communications function of smart phones.

"The digital currency can be conveniently used without the internet. Users can make transactions or payments by bringing two mobile phones with electronic wallets close to each other," said Dong.

"New technologies can support micropayment (by the digital currency). The digital encryption technology can ensure the security of transactions," said Xu.

Compared with paper cash, digital cash can reduce transaction, usage, management and other costs, according to Dong.

"On a national level, the central bank-backed digital currency can reduce the cost of issuance - issuing paper cash and coins incur costs in printing, transportation and management. The usage of digital money can also reduce management costs for commercial banks," he said.

The economist added that digital transactions will not replace cash payment in China in the short term.

The PBOC will be the sole issuer of the "digitalized renminbi," and will originally offer the digital money to commercial banks. That means the banks would then distribute it for use by customers, much as physical currency is issued now.

To avoid excessive money issuance, commercial institutions should set aside provisions equivalent to their digital money holdings.

Contactless payment by the PBOC's digital currency could prove particularly practical amid the global COVID-19 pandemic as the method helps users to avoid viral transmission via cash.