China plans Central Bank Digital Currency, as reported by one of the senior officials with the bank, Fan Yifei. According to the published information, Chinese CBDC will not be built on Blockchain technology.
26 January, AtoZForex – The central bank of China (PBoC) has been considering the issuance of its own cryptocurrency. However, unlike almost every other cryptocurrency, Chinese government-issued digital coin would not be based on Blockchain technology.
PBoC Official States China plans Central Bank Digital Currency
According to the senior official at People’s Bank of China, Fan Yifei, the central bank looks into issuing a potential central bank digital currency (CBDC). The local media report states that bank’s CDBC will be different from the usual decentralized tokens. However, the centralized management and issuance will be of a high-priority. Fan Yifei has further stated:
“CBDC will still be the central bank’s liability to the public. The nature of this liability will not change just because of the physical form of cash going digitalized. Therefore, we must ensure the central role of PBoC in issuing CBDC.
A CBDC will also help curb the public’s demand for private cryptocurrencies, which will strengthen the role of our sovereign currency.”
The bank’s official has further stated that the transactions via CBDC will be visible to the central bank since the digital currency will not be built on Blockchain. The central bank will be functioning as a third party to monitor the potentially illegal activities.
Will CBDC replace Yuan?
Fan Yifei’s remarks appear as the latest from the Chinese central bank. This commentary provides a hint about a potential direction of the CBDC. Earlier, the central bank has already set up the research branch for this purpose.
In addition, these comments are in line with the remarks by Yao Qian, the PBoC’s digital currency research lab’s director. Mr. Yao stated that development of CBDC should not be following the ideology of Blockchain’s decentralization.
In the report, Fan Yifei has stated that the PBoC will exercise caution in respect to the introduction of smart contracts to the CBDC system. He mentioned that since a CBDC will be a substitute for Chinese fiat currency, laws that apply for Yuan will also apply for the digital currency.
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