How does China implement its CBDC?

 This article explains how China implements its central bank digital currency (CBDC). It is an excellent article. 

https://digichina.stanford.edu/work/chinas-digital-currency-and-blockchain-network-disparate-projects-or-two-sides-of-the-same-coin/

Earlier, I had the impression that the CBDC is implemented using blockchain technology. I was mistaken. 

This article explains that the retail CBDC uses a centralized database, which allows it to handle a large volume of transactions. This centralized database is similar to what is implemented by the private payment platforms, i.e. AliPay and WePay.

It also explains that the CBDC is integrated with the private payment platforms. 

It reinforced my earlier belief that the people in charge of the financial system in China know their business. They do not blindly follow the fad of the day.

The article explains that China has a separate project to implement smart contracts using the blockchain technology. This may be used by the payment platform at a later date, in areas where they technology is useful.

Still, there is a question. Why is the e-CNY (i.e. the currency promoted by the CBDC) not taking off? Why is the usage low?

I will share my thoughts in a separate article. 

I believe that the China government will be able to solve this challenge and that the e-CNY will become the successful model to be followed by other countries. 

Tan Kin Lian

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