The Central Bank of China spoke about the future of the state …
The Central Bank of China spoke about the future of the state digital currency
The Central Bank of China is considering issuing its own digital currency, but not necessarily on the blockchain. Writes about this CoinDesk with reference to the local publication Yicai.
In a conversation with the publication, Deputy Chairman of the People’s Bank of China Fang Yifei spoke about the agency’s early plans to develop a digital currency.
He stated that their currency will be significantly different from tokens characterized by decentralization, and the main priorities will remain centralization and control over emission..
“Digital currency will continue to be a monetary obligation of the central bank to society. The nature of this obligation will not change due to the fact that money goes from cash to digital, ”he explained. “The digital currency will also allow us to limit public demand for cryptocurrencies and strengthen the role of our national currency.”.
He also noted that the digital currency will not necessarily work in a peer-to-peer mechanism, as most cryptocurrencies do, which, for the most part, makes them anonymous. The central bank will be able to monitor transactions made using the state digital currency, which will not allow it to be used for money laundering and other types of illegal activities..
In addition, the central bank will be wary of implementing smart contracts that can automate processes using its digital currency. Since this currency will essentially become the digital equivalent of the yuan, it will be subject to the same requirements that govern the circulation of the country’s fiat currency..
Currently, according to Chinese law, the yuan can only be used for pricing, circulation, settlement and storage. The digital currency will have the same functions. Fan explained that the use of smart contracts could allow, for example, to automate the process of collecting taxes and raising funds, but this would be considered a violation of existing laws..
A similar point of view on government cryptocurrency was expressed by Yao Qian, director of the Digital Currency Research Institute run by the People’s Bank of China last year..
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