Financial company Huatai Securities has recently shared some details about the DCEP (Digital Currency Electronic Payment), the payment system developed by the People's Bank of China. According to the company:
"Unlike digital currencies like Bitcoin, which operate in a decentralized system, the DCEP uses a centralized management system."
The DCEP will be controlled by the Central Bank of China, but issued through several commercial banks.
Commercial banks will send a request on behalf of customers to issue the DCEP and carry out transactions with it.
The DCEP has been designed in order to replace cash (M0), so it will work differently from existing electronic payment systems such as Alipay, which are based on the digitization of funds in commercial bank accounts (M1 and M2).
The DCEP should help address the shadow banking problem.
Cryptography will be used in order to ensure the security of transactions with the digital yuan, just like with Bitcoin and other cryptos. The information about transactions will also be encrypted.
Representatives of the People's Bank of China have recently said the development of the digital yuan is in its final stages.
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