The central bank's digital currency competition period: closed-loop testing, public lectures, high-paying recruitment

Editor's note: This article was first published on the WeChat public account Zinc Link (ID: xinlianjie-), author: Zhao Xuejiao; editor: Wang Qiao, pay attention to the public account, and explore the value of industrial blockchain with us. If you need to repost the article, please apply for a whitelist on WeChat.

Editor's note: This article was first published on the WeChat public account Zinc Link (ID: xinlianjie-), author: Zhao Xuejiao; editor: Wang Qiao, pay attention to the public account, and explore the value of industrial blockchain with us. If you need to repost the article, please apply for a whitelist on WeChat.

On September 5, CoinDesk reported that a person close to the central bank said a dedicated team at the PBoC’s Digital Currency Research Laboratory was developing a digital currency system in a closed-door environment, away from the central bank’s headquarters in central Beijing. The team has been working at the separate location since early summer, the person said.

On Sept. 4, China Daily also reported that the central bank’s digital currency (CBDC) had begun “closed-loop testing,” simulating payment scenarios involving “some commercial and non-government institutions.”Zinc Link asked a person familiar with the matter for confirmation and got a positive reply.。

The person also said that the content of the test may be the integration test of the modules developed separately by the CBDC, and the outflow and inflow of digital currency form a complete closed loop

At the same time, on September 4, Mu Changchun, deputy director of the Payment and Settlement Department of the People's Bank of China, opened the course "Frontiers of Technology and Finance: Libra and Digital Currency Outlook" on the "Get App", which was the first time a central bank official gave a public lecture.

Zinc Link found that the Central Bank’s Financial Technology Research Institute in Shenzhen has recently begun to recruit a large number of blockchain technicians, trade finance product directors, senior economists, business innovation researchers and other positions.In addition, according to the Economic Information Daily, as of August 4, 2019, the Central Bank’s Digital Currency Research Institute has applied for a license involving digital currency.。

74 patents

Talent reserves, patent applications, closed-loop testing, the central bank's digital currency is "ready to go".

secondary title

1. The competition with Libra"China cannot lose the opportunity to develop in the field of digital currency"

, Zhu Youping, deputy director of the China Economic Network Management Center of the State Information Center, told Zinc Link that the central bank’s rush to issue CBDC is mainly affected by the international situation. The root cause is to accelerate the process of RMB internationalization, and Libra is also accelerating research and development.

The Libra white paper has received global attention since its release. However, the Financial Times reported that two unnamed members of the Libra Association were considering withdrawing from the project. The project remains openly optimistic.

China Daily has reported that if all goes well, the central bank’s digital currency could be launched earlier than Libra. Libra is scheduled to debut in the first half of 2020.

On August 28, Forbes issued an article stating that a former government official said that the central bank’s digital currency may be officially launched on November 11, 2019, and will initially be provided to Industrial and Commercial Bank of China, China Construction Bank, Bank of China, Agricultural Bank of China, Issued by 7 institutions including Alibaba, Tencent and UnionPay. The source said that the central bank’s digital currency technology has actually matured in 2018.

Immediately afterwards, Tencent News and Sina Aid came out to refute the rumors, saying that the relevant timeline and the scope of the seven organizations were "inaccurate guesses."Institutions mentioned in Forbes report are indeed involved in central bank digital currency plans。

secondary title

2. Central bank officials give public lectures for the first time

In recent days, central bank officials have revealed more details about central bank digital currencies in their first public lectures.

The course is divided into 8 lectures, focusing on the characteristics and influence of Libra, the exploration of the Chinese central bank in digital currency, the principles and characteristics of blockchain technology, and the perspective of financial management authorities.

In the opening speech of the course, Mu Changchun said: “The whole world has been paying attention to digital currencies over the years. At the beginning, Bitcoin and Ethereum, and recently, traditional large institutions such as Morgan and Goldman Sachs have also begun to deploy their own digital currencies. However, no digital currency has caused tension in the entire monetary and financial world like Libra.Mu Changchun said in the course, 。

Libra does not use pure blockchain technology, but a hybrid architecture, so it cannot be regarded as a blockchain cryptocurrency in the strict sense：

China's central bank digital currency has four characteristics

First, the central bank's digital currency is a substitute for banknotes. Its functions and attributes are exactly the same as those of banknotes, except that its form is digital.

Second, the central bank's digital currency is a "digital payment tool with value characteristics", that is, "value transfer can be realized without an account." When people pay with banknotes, they don't need an account, and so does DCEP.

Third, the central bank's digital currency has unlimited legal compensation, which means that you cannot refuse to accept DCEP. As long as you can use electronic payment, you must accept the central bank's digital currency.

Fourth, the central bank's digital currency can realize dual offline payment, as long as the payment and payment parties have electricity, payment can be made without the Internet.

For the CBDC to adopt a two-tier operation system, Mu Changchun said in the course: If a single-tier launch and single-tier operation are adopted, it is equivalent to the People’s Bank of China as an institution that has to face all consumers in China. The environment is complex and the test is very difficult. severe.Although the system dominated by the central bank has always faced financial institutions, it has not directly faced ordinary people. If the People's Bank of China wants to establish a system that directly faces the common people,。

Budget, resources, and talents will all face objective constraintsSecondly, if a single-tier operation is adopted and digital currency is issued directly to ordinary people, it means that the People's Bank of China will become a competitor of commercial banks.。

In this case, the financing cost of commercial banks will increase, and the real economy will be damaged as a result.