Digital Currency / Electronic Payment (DC/EP)

 Basics

• Started in: 2014
• On 16 April 2020, the People’s Bank of China (PBoC) central bank has started the test phase.
• Mainnet release:
• Aka Blockchain-based Services Network (BSN)
• Based in: China
• The CBDC of China.

• From the CoinDesk 50:

"China leads in the world in the development of national digital currencies. While other central banks are talking about CBDCs, the People’s Bank of China (PBoC) is already trialling its toolkit. Just recently, screenshots emerged of a “digital yuan” interface being piloted at the Agricultural Bank of China (ABC), one of four state-owned banking giants. That PBoC is first to the CBDC starting line is not surprising. It has been working on the project for six years. Meanwhile, China’s government has made blockchain a national priority in several directions, including the recently launched Blockchain Services Network (BSN), which is now being piloted in Chinese cities and along its “Digital Silk Road” trade routes."

History

• Has been planning it's own cryptocurrency for a while.

Token

Launch

• From this article (4-6-2020):

"The Chinese CBDC is currently being tested in four Chinese cities: Shenzhen, Suzhou, Chengdu, and Xiong’an. Up to 50% of the mobility subsidies of government employees are paid out in digital form via mobile DC/EP wallets. Numerous banks, telecommunication, and e-commerce companies such as Tencent and Alibaba participate in the test phase. According to Shirley Yu, Asia fellow at the Harvard Kennedy School, large US franchise companies such as McDonald’s, Starbucks, and Subway have become the first vendors accepting the Chinese CBDC. A second major test run is planned during the 2022 Winter Olympics in Beijing."

Tech

• Whitepaper can be found [insert here].
• Code can be viewed [insert here].
• Built on:
• Programming language used:

Transaction Details

• Capacity (TPS):
• Latency:

How it works

• From this article (4-6-2020):

"The Chinese CBDC is more than just another form of mobile payment. It aims to replace a part of the M0 money supply in the Chinese monetary system. Hence, DC/EP is a digital form of the physical Renmimbi (RMB). It is designed as digital cash and does therefore not carry any interest rate.

DC/EP uses a two-tiered system. The first layer is between the central bank and the banking sector, including also Alipay and WeChat Pay. Through this wholesale layer, the PBoC supplies CBDC to banks. These banks can then channel the CBDC through the second layer to retail clients via digital wallets. Clients do not need to hold a bank account to use the DC/EP."

• From Decrypt (12-6-2020):

"Although China’s digital yuan doesn’t incorporate the decentralized elements of blockchain technology, it does make use of smart contracts, cryptography and tracking to enhance anti-money laundering efforts and combat tax evasion."

Interoperability

• China’s state-backed Blockchain-based Service Network (BSN) has integrated (7-2020) with six public chains including Tezos, NEO, Nervos, EOS, IRISnet and Ethereum.

Privacy Method being used

• From this article (4-6-2020):

"Experts fear that the DC/EP project will negatively affect the freedom of Chinese citizens. Presumably, data on the transaction amount, location, and payment sender and recipient will be visible to the central bank. In addition, personal data, such as the identity of the payee, will be stored digitally. In this way, the PBoC would gain insight into the payment behavior of Chinese citizens.

Potentially, the DC/EP system could also be interlinked with the social credit system creating the possibility to exclude citizens from making financial transactions if they do not play by the rules. According to the Guardian, 23 million people had been prohibited from purchasing flight and train tickets by the end of 2018.

Finally, full control over the payment system also enables the central bank to implement capital controls more effectively. While the PBoC can control the movement of physical banknotes only to a limited extent, a CBDC would enable full control over cross-border capital flows. It should be noted, however, that partially anonymous payments in DC/EP could be allowed. Alipay has filed a patent application for anonymous payments with DC/EP."

Governance

• From this article (4-6-2020):

"The Chinese CBDC is not decentralized. The decision power is fully allocated to the central bank, even if distributed ledger technology (DLT) might be one technology used for the DC/EP. The exact role of DLT remains unclear at this point."

Roadmap

• Can be found [Insert link here].

Audits

• Bug bounty program can be found [insert here].

Pros and Cons

Cons

• Completely centralized and therefor not innovative.

Team, Funding, Partnerships, etc.

Team

• Full team can be found [here].
• Chief Economist Chuanwei Zhou, recently quit Bitmain to join WxBlockchain. Before Bitmain, Zhou was a researcher at the People’s Bank of China

Partners 

• From the Tezos 2020 year end blog (12-12-2020):

"Tezos was selected as one of the first 6 public blockchains for China’s state-backed blockchain infrastructure network, BSN"

• Oasis Network says it is a partner with them (30-12-2020).