People’s Bank of China (PBoC) consistently seems to make efforts to take crucial steps to make e-CNY more relevant and useful. Another such effort came recently when the bank proposed a regime to set up interconnectivity of digital yuan. The Chinese central bank thinks of a universal QR code for payments strengthening the linkage between Chinese CBDC and other digital payment options.
On Thursday, September 8th, 2022, deputy governor at People’s Bank of China Fan Yifei said in order to create a stable ecosystem for e-CNY, standardization becomes crucial. He further emphasized on the importance of unifying the digital digital identity and its promotion, QR code mechanisms, bluetooth and other such near-field communications which would enable consumers to initiate different payments using a single QR code.
Rising Need for e-CNY Smart Contracts
Earlier this month, director general of digital currency institute at the PBoC Mu Changchun also stated about some plans regarding the digital yuan. Citing the increasing use cases and need for more practical solutions, Changchun said to bring a system to review and register new smart contracts.
Changchun said during his speech considering the rapidly growing use cases following the pilot testing of the digital currency, it brings the need for more smart cases. He explained the practical usage of e-CNY has increased in several regions like government subsidies, pre-paid fund management and retail marketing, etc.
The notion of smart contracts came from the blockchain tech, where ideation of digital currency itself belongs. In a nutshell, these contracts are self-performing contracts that eliminates the use of some intermediary or responsible entity to either initiate or operate any function. It handles some crucial tasks including guaranteed payments, conditional payments and other such complex practical usages.
In October, 2022, the pilot phase of digital yuan started in the Chinese state of Shenzhen. Since then, it has reached upto 23 different regions and cities. Last year the Chinese central bank stated that smart contracts of e-CNY could simplify the innovations needed for business models.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.