The Chinese central bank considers its own digital currency, but it can not be built with blockchain technology, according to a senior official.

In an opinion article published by the Chinese media Yicai, Fan Yifei, deputy governor of the People's Bank of China (PBoC), outlined the bank's orientations on a possible central bank digital currency ( CBDC).

Fan said the CBDC of this central bank would fundamentally differ from the chips issued by decentralization, while centralized management and delivery will remain a high-level priority.

[TRADUCTION] "The CBDC will remain the central bank's responsibility to the public, because the nature of this responsibility will not only change because of the material form of the digital cashing, so we must ensure the central role of PBoC in the CBDC issue. " Fan wrote, adding:

"A CBDC will also help reduce public demand for private cryptocurrencies, which will strengthen the role of our sovereign currency."

The official said that digital currency may not work through a peer-to-peer mechanism, as do most cryptocurrencies, and that brings the key features of anonymity and non-compliance. -Traceability. He explained that transactions using the CBDC will be visible to the central bank, which would operate as a third party to monitor potential laundering and illegal financing activities.

Fan's comments are the latest comments from the central bank that gives an overview of its takeover by the CBDC after setting up a research branch for the problem.

These comments are also in line with the arguments put forward by Yao Qian, the director of the PBoC's Digital Currency Research Laboratory. While heading the lab on blockchain – based digital currencies R & D, Yao said last year at a conference that the development of the CBDC should not be limited to only one. ideology of decentralization and distributed distribution.

In the article yesterday, Fan said the central bank would be cautious in introducing smart deals – a feature of some blockchain platforms that can automate certain processes – to the CBDC system. According to him, since a CBDC will essentially replace the country's fiduciary currency, the existing laws that apply to the yuan should also extend to digital currency.

At present, Chinese laws specify that the Chinese yuan can only be used for pricing, circulation, payment and storage, as well as the CBDC. Fan explained that the addition of a smart contract feature to the PBoC's digital currency could enable other functions such as tax automation and fundraising, which could be illegal activities.

PBoC Image via the CoinDesk Archive



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