The Capital
Published in

The Capital

China enters a new phase in the development of Digital Yuan

Check out our new platform: https://thecapital.io/

So how accessible is the technology?

We do not know the participation limitations, but we are aware of various widely reported leaks claiming to provide evidence the Big Four have been developing digital wallets for users to be accessed through their existing banking apps.

When will DCEP launch?

It depends on one’s perspective; the timeline seems to be heading towards a Q4 2020 expansion via the new regions, including the banking in-app features, with testing throughout 2021 and “public launch” thereafter.

Are there any innovations above a Central Bank Issued Digital Currency?

It is likely that the innovations will come with the natural integration of blockchain technologies into the financial system, but at this point the details are limited. What we do know is DCEP supports ‘double offline transactions’, meaning users can transfer digital currency without an internet connection.

Digital Yuan: A technical perspective

So, how will it work? Certified Blockchain Solution Architect Dan Thomas explains how the Digital Yuan could work from a technical point of view.

Nothing new to add?

It does, however, come with certain restrictions.

  1. The application would need to be highly encrypted, secure, and not open-source.
  1. The devices would normally only work for payment if they have recently connected to the main network to validate their own data, and if the amount was under a “low risk” value.
  1. To trace any criminal activity or falsified transactions (deliberate double-spending for example through hacking the app) full KYC would need to be done, the app would need to be permissioned, and your wallet would be permanently linked to you.

True transparency? Don’t bank on it

The problem with a cryptocurrency that is backed by a fiat currency run by the same organisation as controls the fiat currency issuance, is that it loses all value and suffers from the same issues as existing fiat models.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Lee Hills

CEO, SolutionsHub | EGR Cryptocurrency Services Supplier 2022 | Non Executive Board Member, Digital Isle of Man