DCEP will operate on a two-tiered system

The issuance and distribution of DCEP will be based on a two-tiered system.The first tier would be transactions between the PBOC and intermediaries.These intermediaries would be financial institutions (e.g.the four major state-owned banks, i.e.China Construction Bank, the Agricultural Bank of China, Bank of China and the Industrial and Commercial Bank of China)and non-financial institutions such as Alibaba, Tencent and UnionPay.Here, the PBOC would issue DCEP to the intermediaries.

The second tier would be between the above-mentioned intermediaries and participants in the retail market such as companies (e.g.retail stores)and individuals.In this tier, the intermediaries that have received DCEP will distribute it to the retail participants so that it would circulate through the market e.g.through people buying things at stores etc.

The main difference in the issuance and distribution of DCEP compared to traditional cash however is the fact that DCEP would be transferred through electronic wallets, rather than bank accounts.