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Entering 2020, news about the central bank's digital currency DCEP is endless.
Obviously, the launch time of DCEP is getting closer.
This is a revolutionary attempt in the history of human currency. Domestically, DCEP is expected to set off an upsurge in the construction of new financial infrastructure; internationally, DCEP may become a new solution for cross-border payments.
How will DCEP change our lives? Are people ready for this brand new revolution?
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launch approaching
In August, news of the high-profile central bank digital currency DCEP continued.
On August 12, the Ministry of Commerce mentioned in the "Overall Plan for Comprehensively Deepening the Innovation and Development of Service Trade Pilots" that digital renminbi pilots will be carried out in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, and the central and western regions where conditions permit.
This time, the pilot scope of DCEP is no longer limited to Shenzhen, Suzhou, Xiongan New Area and other places, but has expanded to 28 provinces and cities including Beijing, Tianjin, Shanghai, Hainan, and Dalian.
On August 19, the Shenzhen Local Financial Supervision and Administration Bureau stated on its official website that financial technology innovations such as "digital currency research and mobile payment innovative applications" have made positive progress, and digital currency internal testing is being carried out in an orderly manner.
People may ask, in which scenarios will DCEP first land. In April of this year, media reported that Suzhou had already used DCEP to pay civil servants. Half of the transportation subsidies for some civil servants in Xiangcheng District, Suzhou will be issued in the form of DCEP. Recently, a number of civil servants in Suzhou told a blockchain that they have not received relevant notices, but they have heard about digital currency. "It should only be issued in one district of Xiangcheng, and it may expand to the entire Suzhou in the future." A local civil servant said.Commercial bank APPs that support DCEP are also available for download. A blockchain has previously reported the launch of the Agricultural Bank of China's internal beta version of the DCEP wallet. At that time, bank insiders said that the APP adopted a whitelist system and could only be registered upon invitation. (See:） "The central bank's digital currency is about to come out: the wallet is being tested internally, and related concept stocks collectively soared" "21 Finance" quoted sources from Suzhou Bank as saying that the DCEP application scenarios selected in Suzhou and other pilot areas are mainly concentrated in small-scale scenarios such as retail, transportation card recharge, and catering, and are closed pilots. Once the technology is mature and approved by relevant departments, the application scenarios may be extended to medical care, education, e-commerce, tourism, cultural consumption, etc. Wei Xianhua, a professor at the School of Economics and Management at the University of Chinese Academy of Sciences, told Yiben Blockchain that during the pilot phase, when the central bank chooses the DCEP landing scenario, it should start with simple business and gradually expand to complex scenarios in the future. "Personally, I think the technical issues (of expanding complex scenes) are less of a problem." At the same time, some listed companies that are considered by the outside world to be "digital currency concepts" have cooled down for shareholders. Recently, Huijin, Zhongying Internet, etc. have issued announcements, saying that they have not participated in the development of the central bank's digital currency.We seem to have heard the clarion call of charge—the time when DCEP is officially launched is getting closer.
Huijin Clarification Document
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Five years of sharpening a sword
The People's Bank of China's exploration of digital currency can be traced back to 2016.
In January of that year, the central bank held a seminar on digital currencies. At the meeting, the central bank announced for the first time that it was studying the "digital renminbi".
Two years later, in March 2018, Zhou Xiaochuan, then governor of the central bank, revealed that the digital currency being developed by the central bank was called DCEP: "'DC' means 'digital currency' (Digital Currency), and 'EP' means 'electronic payment'. '(Electronic Payment)."
Since then, the research and development of DCEP has entered the fast lane. In June 2019, when Facebook announced its ambitious Libra plan, people's expectations for DCEP were further improved.
From 2016 to today, 5 years have passed. Why has the research and development of DCEP continued for so long? Many industry insiders told Yiben Blockchain that this may be related to the huge challenges facing DCEP.
"The central bank's DCEP wants to achieve M0 replacement, that is, to replace part of the banknotes with DCEP, and its significance can be compared to the substitution of paper money for gold coins and silver coins in history." Sun Yuan, a blockchain researcher, told Yiben Blockchain, "This is in the world. There is no precedent in history."
In terms of specific technical routes, the central bank's DCEP also faces many choices.
"At present, the specific technical details have not been announced. The industry speculates that the central bank's DCEP may not have adopted a blockchain solution, but it has borrowed a large number of cryptography implementation methods from digital currencies such as Bitcoin." Sun Yuan speculated.
In September 2019, Mu Changchun, director of the Central Bank's Digital Currency Research Institute, gave a class on "Get" to tell the story behind the development of DCEP. Many details of DCEP's research and development have been exposed.
He revealed that in order to test the performance of the blockchain solution, the relevant team of the central bank once conducted an experiment.
They found 4 high-performance servers with 8-core CPU and 256G memory, and built a blockchain platform. It is deployed on a local area network, with fast network speed, few nodes, and powerful performance, but it can only achieve 30,000 transactions per second.
This figure has surpassed the concurrency limit of VISA and other credit card platforms, but it cannot meet the needs of China's financial industry. On the "Double 11" in 2018, the peak concurrent volume of NetsUnion, a subsidiary of UnionPay, reached an astonishing 92,000 transactions per second. .
Therefore, the central bank's DCEP cannot copy the existing blockchain platform, and must find another way.
In addition, DCEP also has a large number of exclusive functions and product details, which need to be repeatedly polished by the central bank.
For example, in terms of anti-money laundering, the DCEP digital wallet has a hierarchical and limited design. The user registers the wallet with a mobile phone number, the lowest level, which can only meet daily small payment needs; after binding the ID card and bank card, the account will be upgraded; if the visa-free counter is completed, "then there may be no limit."
DCEP also supports "dual offline payment", that is, neither the payer nor the receiver needs to be connected to the Internet to complete the payment like cash.
"This function has certain technical difficulties." A mutual financial practitioner told Yiben Blockchain, "Alipay and other companies have also launched similar products, which are mainly suitable for subways, airplanes, cruise ships, etc. with unstable or no signal. scenario. But in Alipay’s solution, the payee must be a ‘trusted merchant’ certified by the platform, and individuals cannot collect money offline.”
The DCEP solution is expected to realize dual offline collection and payment between individual users.
According to the patent "Method and System for Offline Payment Using Digital Currency Chip Card" published by the Central Bank's Digital Currency Research Institute, the central bank has proposed an offline solution code-named "D-RMB card":
At this time, B's DCEP wallet balance will increase by 100 yuan, and B can use the received 100 yuan only after reconnecting to the network for verification. This avoids fraudulent transactions, double payments, etc.
image description secondary title future With the support of many functions, where will DCEP go? "It is foreseeable that after the launch of DCEP, everyone from UnionPay, NetsUnion, to commercial banks, to WeChat and Alipay will follow up." Sun Yuan said, "Especially the follow-up of commercial banks and ordinary merchants will give birth to Demands such as equipment upgrades and transformations will be raised, and a large number of industries will be driven to develop.” With DCEP, what upgrades will occur in Chinese society? "From the current information exposed by the central bank, the smart contract function of DCEP will be temporarily limited to the currency function, that is, the central bank will first make the currency itself." Wei Xianhua said, "But there are also voices in the industry calling for the release of some functional modules of DCEP in the future. , let it solve more problems.” For example, the central bank can open up some functions of DCEP to the civil affairs department of the government, allowing them to use DCEP to achieve targeted poverty alleviation. Through DCEP, the government can accurately reach the front line of poverty alleviation funds, and the cost of opening accounts for the poor will also be greatly reduced. Under the guidance of this idea, DCEP still has many potential application scenarios. For example, consumer coupons recently issued by local governments can also be issued with the help of DCEP. Common people's bus and subway cards can be upgraded to DCEP cards, which saves recharging and other links, and makes it more convenient to report loss and refund. It is not difficult to see that a large number of potential application scenarios of DCEP are concentrated on the C side. "The central bank has made many explorations in recent years in terms of B-side businesses such as trade financing and supply chain finance. However, the business that the public cares about and perceives the most is still on the C-side. Only when the C-side starts to be used can DCEP be truly implemented. "Wei Xianhua said. However, on the C side, ordinary people may not have a clear perception. Some people in the industry said that in the initial stage of implementation, DCEP may have little difference from the existing online banking, Alipay, and WeChat in terms of user experience. And that may be exactly what the central bank is aiming for. "The best user experience is to not feel the difference." Wei Xianhua said. Internationally, DCEP is expected to become a major channel for RMB cross-border payments. "The situation between China and the United States has been tense recently. If the United States makes a tough move to ban SWIFT against China, DCEP can become China's backup plan." Some practitioners pointed out. In fact, the Libra project, which once caused a sensation around the world, seems to be in trouble in 2020, and regulators such as the US Congress have continued to oppose Libra. At the same time, DCEP has made breakthroughs in China. "According to the development progress, DCEP will definitely be faster than Libra." Sun Yuan said. DCEP is expected to reshape the existence of RMB. The significance of this cannot be underestimated. "This is not only the renminbi, but also a major upgrade in the history of global currencies." Someone commented.future
DCEP will become an important part of China's "new infrastructure" and leverage a broader market.
