Breakthroughs in financial technology (fintech), ranging from early coins and banknotes tocard payments, e-money, mobile payments, and more recently, cryptocurrencies such as Bitcoin, portendtransformative changes to the financial and monetary systems. Cryptocurrencies has a high degree of similarityto the base currency or central bank currency. This functional similarity may bring multiple challenges to thecentral bank, including the central bank's monopoly on the issuance base currency, price stability, smoothoperation of the payment system, implementation of monetary policy, and stability of the banking and financialsystems. Faced with these challenges, the central bank began to explore and test the issuance of the CentralBank Digital Currency (CBDC). This paper analyzes the reasons why the central bank issues CBDC, thepotential impact, the two main modes of CBDC and the distribution channels, and whether or not to use andhow to use distributed ledger technology, from a legal perspective to analyze a series of legal challenges facedby China in issuing CBDC. Resolving such legal challenges can be a daunting task that requires the revision ofmultiple laws and regulations.