Yao Qian, former Director of the PBOC Digital Yuan Research Institute, believes that their CBDC can be established on the Ethereum network.
Can CBDC be Established on the Ethereum Network?
When discussing the operational architecture of a central bank digital currency (CBDC), Yao Qian, science and technology supervision bureau chief of the China Securities Regulatory Commission (CSRC), remarked during the spring meetings of the 2021 International Finance Forum (IFF):
“We may assume that if the central bank’s digital currency runs directly on blockchain networks like Ethereum and Diem, the central bank would be able to use their BaaS services to directly supply the central bank’s digital currency to users without the use of middlemen.”
Overall, Yao identified seven factors to consider while researching and constructing a CBDC: its technical path, value attributes, operational architecture, interest accrual, distribution, smart contract implementation, and regulatory difficulties.
The official emphasizes that a digital currency cannot be a “simple imitation” of real money, arguing for the development of smart money. He did, however, draw attention to the risks of smart contracts, arguing that the technology needed to mature.
In terms of rules, Yao advocates for finding the right balance between preserving users’ privacy and guaranteeing compliance with fundamental anti-money laundering and know-your-customer (KYC) rules.
Yao Qian, a Chinese SEC official, said that the central bank’s digital currency can be set up on the Ethereum network. But he said that he only represents personal academic views.
— Wu Blockchain (@WuBlockchain) May 31, 2021
Does “Crypto Dad” Believes the CBDC of China will actually be shifted to Ethereum?
Yao, popularly known as China’s “Crypto Dad,” is one of the most prominent figures in the blockchain business.
He was the head of the People’s Bank of China’s (PBOC) digital currency research subsidiary until September 2019, when he was replaced by Mu Changchun.
However, he stressed in his address that he was merely expressing his personal opinions, which did not represent those of the PBOC
He also refuted a claim made by Federal Reserve Chairman Jerome Powell last month, in which the Fed chairman claimed that tokens such as the digital yuan will allow banks such as the PBoC to “watch every payment that’s used.”
“The PBOC’s objective was not to assist the government in seeing all transactions in real-time. In the face of the tide of digitalization, central banks must assist fiat money in innovating.”