The Future of Cryptocurrency? China’s Entirely Digital Currency Explained (DCEP) – TLDR News
Changchun Mu, the head of the cryptocurrency division of the People’s Bank of China, said that the digital yuan is different from bitcoin or stablecoins and does not need fiat to provide value..
According to him, the digital yuan is for making payments, not speculation. However, Changchun Mu never spoke about how the NBK plans to peg the value of the national digital currency to the traditional yuan..
Chinese officials are just starting to reveal technical details future CDBC. Mu said recently that the developers had almost completed work on the project and would begin testing shortly. in the cities of Shenzhen and Suzhou.
It is known that the digital yuan will function in a two-tier centralized system, with the NBK at the top and commercial banks at the second tier. In order for commercial banks to receive electronic funds, they will first need to reserve an equivalent amount of fiat with the NBK. Further, citizens and companies will be able to open wallets in these banks in order to be able to use the new means of payment.
At the same time, the purpose of the launch of the digital yuan is not to squeeze out cash, but rather to supplement it with an alternative option for settlements. Although critics believe that this is a new tool for the government to monitor citizens.
text: Ivan Malicheno, photo: gate