Digital Juan: PBOC releases whitepaper with latest update

The People’s Bank of China (PBOC) has released a new whitepaper relating to the country’s progress on central bank digital currency (CBDC).

The

sponsored

15-page document

, released on July 16, offers updates on the development of China’s e-CNY, or digital yuan. It also outlines various key definitions, goals and visions for the project. Including that the e-CNY is a digital version of fiat currency; that it adopts a centralized management model as well as a two-tier operating system; and that the CBDC will primarily act as a substitute for and coexist with cash already in circulation.

This is the first whitepaper released on the subject since work on the digital yuan began in 2014.

Sponsored Sponsored

Detailed explanations

In many cases, the whitepaper repeats or elaborates on points already discussed in previous updates. However, it also clarifies other areas. For example, it states that the state is the only person capable of issuing the digital yuan.

The PBOC is located at the center of the e-CNY operating system.
– The document reads.

It issues e-CNYs to authorized operators, which are commercial banks, and manages the e-CNY throughout its life cycle. Meanwhile, it is the authorized operators and other commercial institutions that exchange and put e-CNYs into public circulation.

Also, visitors traveling in China will temporarily be able to use the digital yuan. Reports indicate that travelers will be able to set up temporary e-CNY wallets

. Whitepaper asserts that one of the goals of the digital yuan is to diversify the forms of cash provided to the public.

With the development of digital technology and electronic payments, the use of cash in retail payments is on a downward trend.
– Asserted.

However, it is the mandate of the central bank to provide the public with direct access to cash and to ensure the integrity of the unit of account in the age of the digital economy by digitizing cash.

People without bank accounts can use basic financial services provided through the e-CNY wallet, and foreign residents temporarily traveling in China can open an e-CNY wallet to meet daily payment needs without opening a domestic bank account.

Anonymity and privacy

Another issue raised by the whitepaper was anonymity and the possibility of

See also  VeChain targets pet food market in China

to track transactions. An issue that officials have had to clarify in the past. The committee said the digital yuan will support anonymity management, devoting an entire section of the whitepaper to the issue. As part of that, it also said it would adhere to the principle of “anonymity for small values and traceability for large values.”

More specifically, it asserted that their goal is to:

Satisfy public demand for small value anonymous payment services based on the risk characteristics and information processing logic of the current electronic payment system.

However, the paper also maintained the need for PBOC:

To protect against the misuse of e-CNY in illegal and criminal activities such as tele fraud, online gambling, money laundering, and tax evasion.

Explanation

All information contained on our website is published in good faith and for general information purposes only. Any action taken by the reader in relation to the information on our website is solely at the reader’s own risk.