The People’s Bank of China (PBOC) will keep a database of all transactions made using the digital yuan, China’s central bank digital currency (CBDC), according to China Daily.
The PBOC’s centralized design means that it “will spearhead the country’s digital currency issuance and management system, which will control the issuance quota, and conduct unified technical, security and application standards,” the publication reports.
“More importantly, it will manage digital renminbi wallets, which will allow users to draw money from their electronic devices.
“In this respect, DC/EP will be different from the distributed ledger used by private-sector, decentralised cryptocurrencies such as Bitcoin and Facebook-backed Libra, which are not allowed to be used in China as legal money, while trading in crypto assets was banned earlier.
“Chinese monetary authorities chose a centralized design approach, which will record all transactions of the digital currency in the central bank’s own ledger.”
The PBOC will adopt a “two-tier design framework” for the digital yuan, which will “enable the bank to deliver digital currency to commercial banks first, and then to retail users” and “will better solve the problem of ‘financial disintermediation’,” the report adds.
China Daily also cites a PBOC official as saying that the digital yuan “could also serve as a back-up for electronic payments in the event of extreme situations like, say, a platform collapsing suddenly or when it needs to be closed at short notice”.
The PBOC reported finding the first counterfeit digital currency wallets last month.
Read more: https://www.nfcw.com/2020/11/11/369126/china-to-maintain-central-database-of-all-digital-currency-transactions/