A report by Huatai Securities reveals details about the digital coin (CBDC) of China’s financial institution . Also referred to as the digital Yuan Pay Group, its launch caused great excitement during 2019 and has been one among the triggers of the race for digital coin that has moved the priorities of major financial institutions, like the financial institution of Europe.
Digital Yuan are going to be different from Bitcoin
According to the report, China’s digital coin are going to be different from other stable coins:
Unlike digital coins during a decentralized system like Bitcoin, (the digital Yuan) adopts a centralized management system.
This discovery is in line with the statements issued by the Deputy Director of the financial institution of China, Mu Changchun. In December last year, the representative of the financial organization stated that the digital Yuan also will differ from Bitcoin because it’ll not be suitable for speculation and its value won’t be subject to a currency basket like Facebook’s Libra.
The operation of the digital Yuan are going to be handled exclusively by the financial institution of China. However, variety of pre-selected banks are going to be ready to issue the CBDC. Once issued, the financial institution of China will control and approve all transactions made by commercial banks on behalf of their customers. At this stage, the financial institution are going to be ready to choose whether a transaction is approved or rejected, giving China tighter control over its economic system and citizens.
The financial institution of China will use basic encryption to make sure the safety of transactions and their “proper” use. Although it’ll use encryption, like Bitcoin and other cryptocurrencies, the financial institution of China won’t use a public blockchain or explain of the transactions. Therefore, it’ll lack one among the elemental principles of Bitcoin: the power of its users to scrutinize all transactions processed within the blockchain.
In addition, China’s financial institution has designed the digital Yuan to be immune to attacks and double-spending transactions. Therefore, it’ll use authentication technology to make sure that a user doesn’t plan to repeat a given transaction. Hence, the financial institution of China will have detailed information about the users of the Digital Yuan. The report reveals that there’ll be three entities responsible of managing the utilization of the digital Yuan, registering users and analyzing information from the utilization of the CBDC.
One of the advantages of the digital Yuan will allow users to form transactions without being connected to the web . Thus, the financial institution of China expects that there’ll be a greater adoption of the CBDC. Users also will have access to a wallet which will make sure that the above points are met. Security are going to be a priority and therefore the digital Yuan’s wallet will use methods against attacks and hacking like biometric codes and passwords.
The digital Yuan is in its test phase. This first stage is being executed by the financial institution with partner financial institutions and personal companies. Its first objective are going to be to work out , through a contest among the test participants, which can be the simplest thanks to implement the digital Yuan within the chinese economic system.