China’s Digital Currency(DCEP) And Its Development With Blockchain Technology
DCEP is a digital form of national currency issued by the People’s Bank of China. It is operated by designated operating agencies and exchanged for the public, and it’s equivalent to the national currency.
Although the tech group doesn’t disclose any details about the technology used in DCEP, we can see that blockchain technology is well used in the DCEP through the developer document provided by the operating agencies.
Blockchain technology is currently mainly used in the digital currency of the central bank for the management of digital currency wallet addresses, the supervision of transaction information, and the transaction supervision of digital bills, as follows:
The Wallet Address Management With Blockchain
The Supervision Of Transactions With Blockchain
The Supervision Of Digital Bills With Blockchain
Since the launch of the pilot of DCEP, the digital currency of China has insisted on positioning as M0 (Cash In Circulation). The main feature of M0 is that it does not bear interest, which also determines that the current digital currency wallet is widely used by users for small retailers. In order to meet users’ wealth management needs for long-term, large-amount holdings, and to consolidate customer stickiness, many banks have begun to introduce balance management functions.
Auth Lab has found that at present, many digital currency operating banks have launched smart management of digital currency wallets in their mobile banking apps, which can support the automatic swap of digital currency wallet balances into deposits.
- For example, ICBC mobile banking digital currency wallet “Smart Swap” interface shows that digital currency can be automatically converted into demand deposits.
- CCB The mobile banking digital currency interface also has a “Balance Automatic Redemption” function. This function is a personalized service provided by CCB for individual users and supports the automatic payment of DCEP in the CCB digital currency wallet.
- In addition, there is an “Automatic Combination Payment” function in the market. Taking China Construction Bank as an example, after enabling this function, when the user pays through the CCB digital currency wallet, if the wallet balance is insufficient, the difference between the payment amount and the wallet balance will be automatically deposited into the wallet by binding the bank card with this function. , and complete the payment. Using this function to deposit the bank card balance to the wallet, the single transaction limit is 5,000 CNY, and the daily cumulative transaction limit is 10,000 CNY.
On May 9, affected by the news that the DCEP version of “Consumer Coupons” was issued in many places, the A-share digital currency sector rises again.
According to data from Alipay, since the start of the digital currency pilot, Alipay has continued to open up merchant scenarios. Up to now, nearly 6 million DCEP sub-wallets have been pushed to merchants served by Alipay. By linking the Internet platform to explore the pilot, the DCEPi has become a new means of promoting consumption, and relevant news has continued recently. Hainan Province plans to issue 10 million yuan of DCEP consumer coupons in May; Shenzhen Baoan District launched a 100 million DCEP car purchase subsidy.
Some institutional analysis pointed out that the current scope of digital currency pilot cities has been expanded to 23 cities, and it is expected that DCEP versions of “Consumer Coupons” will be issued in many places.
“The central bank of China is putting a positive attitude on the digital currency, although the technology of DCEP is not fully based on the blockchain, yet the blockchain technology has been well integrated into the tech framework for future possibilities. We believe that more and more countries and originations will join the blockchain technology and stimulate the development of blockchain technology.” Said Nathan Tan, the Chief Security Officer of Auth Lab.