It seems that China, with the help of everything learned about digital currencies and the Chinese blockchain, intends to offer its digital yuan to compete with the US dollar and has nothing to do with Bitcoin.
Matthew Graham, a veteran investment expert and CEO of China's Sino Global Capital, reviewed all the knowledge about China's future digital currency, arguing that the Chinese government views the technology as an "opportunity for leaders" to reduce dollar dominance.
In an interview with Micheal Gu, the founder of Boxmining, Graham said it was difficult for China to internationalize Renminbi (China's official currency). However:
Swift, CHIPS, Fedwire […] are very old, expensive and slow. It's 2020, and we have transactions that take three days to clear, and fees are much more expensive than they should be. All of these technologies, which make up the bulk of our dollar-based economy, are now obsolete. So this is a great opportunity [for China].
According to Graham, China's Digital Currency Electronic Payment Digital Currency Electronic Payment System, abbreviated to DCEP, "borrows much of its technical details from the Chinese blockchain," which includes concepts such as UTXO. UTXO, or User Inventory Review using the history of previous transactions, is one of the basic foundations of the Bitcoin network.
But the currency is very different from the general Chinese blockchain, like Bitcoin. According to reports, the People's Bank of China (Central Bank of China) will offer this currency and, like other existing Fiat Melli currencies, will be completely under the control of the Central Bank.
"If you look at China's digital currency from the context of the Chinese blockchain or ordinary digital currencies, you will have a very difficult time understanding it and the reason for its importance," Graham said.
New technologies integrated into the digital yuan, including aspects borrowed from the Chinese blockchain, have been used for a variety of purposes. Joe referred to remarks made by the head of the China International Economic Exchange Center, who said:
China's digital currency can be a useful reference for making money and implementing monetary policy by collecting real-time data on money creation, accounting, and so on.
Graham also added that in terms of monetary policy, China's digital currency "can be very useful for implementing negative interest rates." He said:
With the help of artificial intelligence and machine learning, this currency has many capabilities for detecting scams [3] and its programming capability should not be forgotten.
Graham added:
This is an opportunity for leaders. China's digital currency has nothing to do with Bitcoin. This currency wants to globalize renminbi, at least as far as possible.
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