Beijing uses the acronym DCEP to refer to its forthcoming digital currency electronic payment system and, as Matthew Gu noted, has “borrowed a lot of its technological details from blockchain,” including concepts such as UTXO.
So, Will China's Digital Yuan Target the Dollar Or Bitcoin?
Structurally digital Yuan can't target bitcoin! They simply don't belong to the same league. However with digital Yuan, China will more effectively control their citizen's finance. Once they achieve a good percentage of coverage, it will be very difficult of Chinese people to conduct any sizable illegal transactions. Fiat still has certain degree of anonymity but with digital Yuan, that will be gone for good!
So China will be effectively attack their own citizens with this!