Beginning of the month, a Chinese think tank suggested that the People’s Bank of China will be able to follow the trail of customer fund flow to collect and process large amounts of transactional information through the database of the Central Bank Digital Currency (CBDC).
Although the idea of CBDC was made public last year and till date, there is no exact launching announcement, China’s initiative in securing 84 digital payments-related patents shows how serious China is about the CBDC issuance.
Reportedly, the patents are responsible for:
- Designing protocols that will control the issuance and supply of digital renminbi
- Frameworks to perform interbank settlements and integration of the CBDC with China’s existing retail banking infrastructure
- Show plans towards programmed inflation control mechanisms
- Creation of a middle-layer entity that will allow customers to deposit fiat and withdraw the digitized renminbi
- Creation of digital wallets or chip cards for retail holders of the CBDC
Consequently, the chairman of the U.S. Federal Reserve revealed that developments like Facebook’s Libra and China’s CBDC plans have brought CBDCs to the forefront. Furthermore, think tanks of central bankers from Canada, Sweden, Switzerland, Japan, as well as the European Central Bank (ECB) is set to hold its inaugural meeting in April.
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