An Inside Look At China's Government Controlled Cryptocurrency Project

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A group of Shanghai reporters recently got a opportunity to learn about this secretive project during the Global Blockchain Summit Forum, sina.com.cn reported. The trip shed light on the extent of the government's efforts to create a national cryptocurrency. The reporters visited the Bank of China Credit Card Industry Development Co., Ltdā€¦ Hangzhou Blockchain Technology Research Institute.

Standards Announced

China's ministry of industry and information technology revealed last week that it has conducted a study exploring a framework for standardizing blockchain technology domestically. The ministry's information and software services department and the China Electronics Standardization Institute proposed a new technical committee to be established.

The embracive stance toward blockchain technology is in stark contrast to China's crippling curbs against neighborhood cryptocurrency markets which have seen initial coin offerings (ICOs) outlawed and crypto exchanges phased out to effectively shutter domestic trading markets.

The China Banknote Bank Credit Card Industry Development Co., Ltd., one of the core companies of the China Banknote Printing and Minting Corporation, is the earliest team to study digital money and blockchain technology inside the central financial system, sina.com.cn reported.

The group last year established the Banknote Blockchain Technology Institute.

Leading the team is the central bank's science and technology pioneer Zhang Yifeng. According to Yifeng, the research and development team is less than 100 people.

The Project Progresses

The China Boxer Blockchain Technology Research Institute has applied for 22 blockchain technology creation patents so far, sina.com.cn reported.

The group's underlying technology architecture has been completed and the central bank's digital billing business has also been completed, based on Yifeng. Currently, it is promoting the opening and closing of a blockchain registration platform.

Yifeng said the most significant part the blockchain is to re-optimize the technology in conjunction with the actual business whilst looking for application scenarios.

Not only can the participants of this platform use it, they can also conduct institutional certification and circulation and achieve mutual confidence and cooperation among all parties.

The largest difference between digital currency and the existing electronic payment is it can be account-based or non-account-based, Yifeng stated.

Digital currency seeks to facilitate the convenience, speed and low cost of a payment system, while at the same time providing security and protection of consumer privacy.

Only The Official Cryptocurrency Recognized

Just the statutory digital currency issued by the central bank is the real digital money, he said. Not Ethereum or bitcoin.

The electronic currency represented by bitcoin is in fact a digital asset with more powerful attributes, more volatility, and largely lacks intrinsic value, he said. Digital currency still wants to satisfy the basic characteristics of money, and the basic characteristics of value scale, exchange media, payment tools, and value storage have not changed.

The coins issued by ICO are even more ridiculous, Yifeng stated. In addition, he asked, how can a sovereign credit currency act as a liquidity tool and payment instrument?

There is no clear timetable for the launch of the legal digital currency, he said.

Meanwhile, the Blockchain Technology Research Institute will establish cooperative relationships with numerous universities and research institutes to promote research in areas such as cryptography algorithms, zero-knowledge proofs, and distributed technologies. At the same time, it is going to apply for more financial technology patents.

The Digital Billing Platform based on blockchain technology that was undertaken by the Group of China Boxer Blockchain Technology Research Institute at 2016 was successfully tested on the Stock Exchange on Jan. 25 this year, according to sina.com.cn.

Fan Guiluo, chairman of China Bills Credit Card Industry Development Co., Ltd., stated that blockchain, as a reliable technology, will be used under the trustworthy method of the Chinese banknote printing and minting company.