Reports have emerged that China is working on Digital Currency Electronic Payment, DCEP.
According to reports in the local media, Zhou Xiaochuan, governor of China’s central bank, revealed plans of a digital currency called DCEP, DC for digital currency and EP for electronic payments with the primary focus of the currency being convenience, speed, and security in payments. One thing that he pointed out what that this may not necessarily be cryptocurrency.
While details of DCEP are sparse, the Governor said it could be based on blockchain technology or distributed ledger technology, or it can be based on existing electronic technology. He said that the digital currency is technically inevitable, but it should pay attention to overall financial stability, prevent risks, and protect consumers at the same time.
One of the purposes of the plans is to study the application of digital currency to enable money to achieve a certain technical solution, essentially the pursuit of convenience, rapidity, low cost of the retail payment system, while taking into account security and protection of privacy, he said.
From the central bank’s point of view, inadvertent products are stopped first, then promising products are tested and certified for further promotion. Therefore, the central bank’s approach was to stop ICOs at the end of August last year. Later it did not support bitcoin and renminbi transactions, and there was a bitcoin-like virtual currency as a payment instrument. Currently, the banking system does not accept or provide related services.
PBoC said all the way back in 2016 that digital currencies are the future, with blockchain technology pretty hot in the country, but talent – which is very much in shortage – is fleeing.
They have gone full authoritarian recently, ordering WeChat to cut off the official accounts of previously global crypto exchanges based in China, such as OKCoin and Huobi.
They have banned all ICOs. Bitcoin as well as other cryptos are also effectively banned, although Chinese citizens keep using them as enforcing the ban is pretty much impossible.
While taking these draconian measures they are at the same time promoting the blockchain, seemingly unaware just how close knit the two are since all the talent and skill was derived from bitcoin or ethereum enthusiasts who first got their hands dirty on those public blockchains.
As such, we’ve called for a boycotting of China last year after they unexpectedly and without notice shut down the crypto exchanges due to the authoritarian behavior of the central government and due to their open hostility towards this space.
With their government now seemingly trying to encourage the application of the technology, but until they open their market, as the now departing governor asked them to, they’ll probably continue falling behind in this space.