Last year when Facebook announced its plans to launch a global stablecoin, China was the first country to announce a state-backed digital currency that is now known as China Coin or DCEP. DCEP is expected to launch in 2020, becoming the world’s first state-backed digital asset. Now Matthew Graham, the CEO of Sino Global Capital, shared a link to a document detailing the architecture of China Coin.
Last year, reports revealed that the project was near completion and was expected to launch in November. However, November came and passed, yet DCEP was nowhere to be seen, and the reports were revealed to be mere speculation. Regardless, it is evident the project is making its way towards the markets slowly but surely.
The document published by Baidu confirmed that the DCEP is going to be digital yuan, i.e., the representation of China’s fiat currency on a blockchain platform. The document revealed that DCEP’s goal is to replace the banknotes in circulation while its “essence” lies in its use as a payment tool.
The creators of DCEP revealed that while the network is different from payment services such as Alipay, it is not as similar to Bitcoin as some might think. The creators of DCEP revealed that the asset would be backed by yuan and would be centralized with control resting with the People’s Bank of China. In essence, Baidu revealed that the architecture would follow a “non-pure blockchain” design.
DCEP would serve the basic functions of both fiat and digital assets, which means that the spending would be non-repeatable. Moreover, the privacy of the network would be similar to traditional banks. However, the asset would have the security and liquidity of crypto assets that would make it much more efficient.
Featured image by pixabay.