The People’s Bank of China (PBOC) working group involved in the research and development of digital renminbi published a paper describing the progress of digital currency. The People’s Bank of China established a working group dedicated to creating a digital renminbi in 2014, and the recently released document is the first white paper released by the project in seven years.
China’s digital renminbi is no different from the physical renminbi
A few years after the birth of Bitcoin and the beginning of the recognition of the cryptocurrency economy, the People’s Bank of China was one of the first central banks to propose the idea of creating a central bank digital currency (CBDC). The Central Bank of China recently allowed the Digital Currency Working Group to publish a white paper detailing the current progress of CBDC.
The white paper entitled “Research and Development Progress of China’s Electronic Renminbi” pointed out that in the course of history, “the form of currency has evolved.” The Digital Currency Working Group of the People’s Bank of China emphasized that the digital renminbi, commonly referred to as “e-CNY”, is no different from the physical form of currency used by the Chinese today.
The white paper pointed out: “The issuance and circulation of electronic renminbi are the same as physical renminbi, and the value of the former is transferred in digital form.” “Third, electronic renminbi is a liability of the central bank to the public. Backed by sovereign credit, e-CNY has Legal tender status.”
The e-CNY white paper also comes with many statistical data and defining characteristics that make it different from Bitcoin (BTC) and stablecoins. According to the paper, more than 20 million digital RMB wallets have been created so far, and US$5.4 billion or RMB 35.5 billion have been settled on the e-CNY network.
In addition to the growth of wallets and settlements seen on the CBDC network, the progress report also pointed out that the digital renminbi protocol has built-in programmability. The working group’s research hints at the use of smart contracts and decision-based transactions.
“[The] e-CNY gains programmability by deploying smart contracts that do not harm its currency functions. Under the premise of safety and compliance, this function can automatically execute payment according to the predefined conditions or terms agreed by both parties, thereby promoting business model innovation. “The white paper focuses on introduction.
Small amount anonymous, high amount traceable
At the same time, the digital renminbi also supports intercommunication with traditional electronic payment systems. The paper further elaborated that in addition to 20 million digital renminbi wallets, 3.5 commercial wallets were deployed.
The white paper explains that the digital renminbi is “non-accrued interest”, which means that it only replaces the “interest-bearing and non-interest-bearing” money supply. The paper also addresses anonymity and privacy, and emphasizes that the network has some privacy elements, but it also prevents illegal financial activities.
“[The] The electronic renminbi follows the principle of’small amount anonymity, high amount traceability’, and attaches great importance to the protection of personal information and privacy,” the white paper pointed out. “It aims to meet the public’s needs for anonymous micropayment services based on risk characteristics and information processing logic. [the] The current electronic payment system. The People’s Bank of China’s digital currency progress report added:
At the same time, by ensuring that transactions meet the requirements of anti-money laundering/fighting against the financing of terrorism, electronic renminbi is prevented from being abused in telecommunication fraud, online gambling, money laundering, tax evasion and other illegal and criminal activities.
What do you think of the electronic renminbi and the white paper recently released by the People’s Bank of China? Please tell us your thoughts on this topic in the comments section below.
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