With the emergence of CBDCs today, there is the problem of the relevance of a monetary purpose for existing blockchains. Member of the Chinese Securities Regulatory Commission, Yao Qian recently exposed a possible case where the digital yuan and the US dollar are operating on the Ethereum network. The government representative spoke on May 30, 2021 in Beijing at an International Financial Forum (IFF).
Ethereum Could Power CBDC, Chinese Government Official Says
Former Head of the Digital Currency Department of the People’s Bank of China, Yao Qian is the current head of the science and technology oversight office within the (CSRC). it’s about the China Securities Regulatory Commission.
At the International Finance Forum, the government representative raised the possibility that central bank digital currencies (CBDC) could run on Ethereum. The summit was originally launched to discuss China’s potential for international partnerships in a post-pandemic world.
During the event, Yao Qian asserted that central bank digital currencies and digital assets should take advantage of the benefits of innovation in the crypto industry. For him, CBDCs must go beyond the traditional concept of money. The future of digital currency according to Qian will certainly be oriented towards “smart money”.
However, the government representative acknowledged that the association of smart contract features with a CBDC raises some concerns. According to him, the CBDC is certainly a “means of payment”, but citizens could also benefit from new technologies to increase income.
Indeed, with the yen and the digital dollar that work directly on Ethereum, users can enjoy direct provision of digital currencies by central banks, without resorting to an intermediary. With one-level operations, people without a bank account will be able to take advantage of the digital currencies of CBDCs to better achieve financial inclusion.
Can a CBDC actually work on Ethereum?
Many people in the Chinese government believe that blockchain technology and smart contracts are not yet ready to host CBDCs. It is therefore important to specify that Qian’s comments are above all personal. They do not really reflect the Chinese regulator.
For Wu Blockchain, Qian is “The equivalent of the US Securities and Exchange Commission Hester” Crypto Mom “Pierce”. Many users think a CBDC on Ethereum would be an unsustainable option due to gas charges. Strictly speaking, monetary functions should be exclusively exercised by central banks. Thanks to state cryptocurrencies, users will now be able to access decentralized applications.
One thing is certain, the CBDCs are on course to capture a large part of the crypto market.. When CBDCs become interoperable most crypto currencies will no longer be able to compete with them.
The comments and opinions expressed in this article are those of the author alone, and should not be considered as investment advice. Do your own research before making any investment decisions.