{"id":478247,"date":"2021-12-06T22:38:16","date_gmt":"2021-12-06T22:38:16","guid":{"rendered":"https:\/\/uniquehot.com\/?p=478247"},"modified":"2021-12-06T23:01:41","modified_gmt":"2021-12-06T23:01:41","slug":"the-peoples-bank-of-chinas-report-on-blockchain-tech-and-their-upcoming-cbdc","status":"publish","type":"post","link":"https:\/\/uniquehot.com\/news\/ai-and-tech\/the-peoples-bank-of-chinas-report-on-blockchain-tech-and-their-upcoming-cbdc\/","title":{"rendered":"The People’s Bank Of China’s Report On Blockchain Tech And Their Upcoming CBDC"},"content":{"rendered":"

Apparently, the People\u2019s Bank Of China is considering using blockchain technology to power the Digital Yuan CBDC. The coin, also known as Digital renminbi or digital RMB, has been in beta-testing for a while now. However, Di Gang, deputy director of the Digital Currency Institute of the People’s Bank of China, recently presented an extensive report on blockchain technology. It was at \u201cthe 18th annual global meeting of the International Finance Forum (IFF) on Dec. 5,\u201d and Chinese journalist <\/span>Colin Wu translated the main points<\/span><\/a> for us to analyze.\u00a0<\/span><\/p>\n

Related Reading | How Samsung Will Help The Bank Of Korea With CBDC Development<\/a><\/strong><\/em><\/p>\n

Before we do that, let\u2019s consider this. Their CBDC is a completely centralized affair. Why would the People\u2019s Bank Of China use a blockchain? In other words, why would China need a blockchain for its CBDC if its aim is not decentralization or censorship resistance? A centralized database is orders of magnitude more efficient than a blockchain. And it doesn\u2019t need mining to validate transactions, nor PoW or PoS to reach consensus. Let\u2019s dive into the report and see if we can find answers to these questions.<\/span><\/p>\n

What Does The People\u2019s Bank Of China Think About Blockchain Tech?<\/span><\/h2>\n

The report begins with stats and a survey\u2019s results:<\/span><\/p>\n

\u201cAccording to Di Gang, 2021, the results of blockchain research conducted by relevant consulting organizations for ten countries, including the United States, the United Kingdom, Singapore, Germany, China and Japan, show that 81% of the institutions surveyed believe that blockchain technology is widely scalable and is being adopted by the mainstream, with the percentage of financial institutions agreeing with it being as high as 84%, and all the global financial institutions surveyed have made blockchain an an imperative strategic priority.\u201d\u00a0<\/span><\/p><\/blockquote>\n

Notice that they talk about belief and about making blockchain a priority, but not about actual usage among traditional financial institutions. The report does go on to say that \u201cA research institute in September 2021, research on the use of blockchain by the global TOP 100 listed institutions shows that 81 institutions are using blockchain technology,\u201d but no source is given. Where are those projects? Are they still in development?<\/span><\/p>\n

Then, Di Gang claims:\u00a0<\/span><\/p>\n

\u201cBlockchain landing achievements are increasing and playing more and more value advantages; on the other hand, blockchain technology has realized landing in cross-border payment, supply chain finance, agricultural finance, trade finance, inclusive finance, social city, “three rural areas”, people’s livelihood, etc.\u201d<\/span><\/p><\/blockquote>\n

Are these crypto-projects, government-related, or traditional finance projects? The report doesn\u2019t specify, so we can\u2019t know their characteristics. Then, Di Gang says \u201cSome large international financial institutions are also actively expanding blockchain application scenarios, including trade finance, information sharing, foreign exchange trading, equity trading, etc.\u201d Why do those institutions need a blockchain to do all that?<\/span><\/p>\n

Does The Digital RMB Or Digital Yuan Need a Blockchain?<\/span><\/h2>\n

Apparently, it does. And the Numerical Research Institute is already working on an implementation:<\/span><\/p>\n

\u201cFirst, a unified distributed ledger was built in the digital RMB system based on blockchain technology. The central bank acts as a trusted institution to upload the transaction data onto the chain to guarantee the authenticity and reliability of the data, and the operating institutions can conduct cross-institutional reconciliation, collective maintenance of the ledger, multi-point backup, etc.\u201d<\/span><\/p><\/blockquote>\n

The Institute wants to build a \u201cblockchain platform for trade finance, with the goal of penetratable information, transferable trust and shareable credit, and to complete the construction of a blockchain-based trade finance ecosystem.\u201d<\/span><\/p>\n

\"USDCNH<\/p>\n

Relationship betwwen the US Dollar and the Chinese Yuan via FXCM | Source: USD\/CNH on TradingView.com<\/a><\/pre>\n
Technical Challenges In Blockchain Technology<\/span><\/h2>\n
The People\u2019s Bank Of China identified the following difficulties with blockchain technology:<\/span><\/p>\n