No bank account needed to use cryptocurrency from Chinese central bank

Binance Research, the research branch of the world’s largest crypto exchange Binance, reports that Chinese people will not need a bank account to use China’s Central Bank Digital Currency (CBDC).

Last week it came out that the official cryptocurrency of the Chinese central bank is almost ready.

Loose coupling and anonymity

Binance Research wrote about this the day before yesterday. The researchers call the CBDC a “disconnected design.” This concept refers to a system of components that are independent of each other.

The result is that users can transfer the CBDC to each other without having to use a bank account. Three underlying ones are described:

1. guarantee a certain degree of anonymity for users
2. speed of payments must be able to compete with a cash payment
3. stimulate the internationalization of the Chinese currency renminbi

The feature of not having to use a bank account seems very special, but two thousand cryptocurrencys already preceded the Chinese currency.

Smart contracts

The report also states that People’s Bank of China (PBoC) is considering using smart contracts in their infrastructure. The bank is still in doubt because they want to keep it as simple as possible.

According to the report, the PBoC is concerned that if they implement smart contracts, this will be a kind of added value for the coin. The central bank does not want that, because otherwise the currency can simply be labeled as a security. And security has less room for maneuver all over the world due to legal obstacles, which goes against the international ambitions of the Chinese central bank.

Currency will not be launched in November

We wrote earlier that the coin could in theory already be launched in November, around Singles Day. The news came from an anonymous source from Forbes. But The Global Times contradicts that the PBoC is planning to release its CBDC in November. The PBoC calls November 11 nothing more than inaccurate speculation.

Refuting media reports or a state-backed cryptocurrency in the coming months, #China‘s central bank termed them as “inaccurate speculation.” pic.twitter.com/Sb4tQVPD3G

– Global Times (@globaltimesnews) August 28, 2019