While the US is exploring the feasibility of a central bank digital currency (CBDC), China is working at a visible rate to make it possible. According to a report by Financial Times, the People’s Bank of China (PBOC) has filed 84 patents related to digital payments.
China’s central bank digital currency
As per the report, the patents are related to the bank’s plans for launching a digital currency electronic payments (DCEP) system. The number of patents filed by the PBOC was revealed after an investigative study by the US Chamber of Digital Commerce.
These patents focus on designing protocols that would control the creation and supply of digital yuan. Moreover, the patents would address the frameworks for interoperability with other banks and the integration of the DCEP in China’s existing banking network.
The patents also hint towards the proposed “tokenomics” that are under the consideration of the DCEP development team. Some of the patents include the details regarding the programmed inflation control mechanisms.
The rest of the patents address the creation of a middle-layer platform that would host the users. This layer would allow users to deposit and withdraw the digitized yuan. Some patents even mention the creation of digital wallets and chip cards for the retail owners of the CBDC.
While many nations are exploring the possibility and feasibility of a central bank digital currency, China has already invested a huge amount of resources into developing it. As things are proceeding, China seems to be the most likely nation that would win the race for a central bank digital currency.
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