Thursday, 28 June 2018

China’s Central Bank Files Patent for Digital Wallet, Hints Towards Planned Cryptocurrency


Although China has opted out from participating in the digital currency market almost a year back, The government is seen aggressively pushing several blockchain projects taking place in the country. Currently, China leads in the total number of blockchain patents filed by its companies followed by the U.S.
Since its launch 12 months back, the Digital Currency Research Lab at the People’s Bank of China (PBoC) has filed more than 40 patent applications till now. These patents are said to be aimed at having a new digital currency while integrating the core features with the existing monetary system.
According to the latest patent application published last Friday on June 22, PBoC is currently working on a new digital wallet which would let users track all their transaction history. The patent outlines how the digital wallet can be used transaction data along with the centralized digital currency issuance registration agency.
The digital wallet is expected to come with high-end security features like multi-signature security. It would also allow users to manage their encrypted digital assets like cryptocurrencies using secure private keys.
The digital wallet patent also hints that it would be holding a digital currency issued by the central bank PBoC or other authorized central institution, but would let users have their holdings in a decentralized manner. In one of the other documents, the Digital Currency Research Lab mentioned that it is building a mechanism for the crypto-featured digital currency which could be applicable in the financial world.
This approach stands quite in line with the views of PBoC vice governor Fan Yifei and Yao Qian, the head of the research lab, who have previously argued on finding an intermediate solution between the centralized and decentralized currency functioning.
The latest patent highlights the continuous efforts made by China’s Central Bank towards developing its own Central Bank digital currency, while at the same time expanding its role among other central institutions.
Back in November 2017, the Digital Currency Research Lab stated: "The virtual currencies issued by private entities are fundamental flaws given their volatility, low public trust, and limited usable scope. ... Therefore, it's inevitable for the central bank to launch its own digital currency to upscale the existing circulation of the fiat currency.”
The final goal of PBoC is to "break the silo between blockchain-based cryptocurrency and the existing monetary system" so that its own digital currency be used within the country’s entire financial structure while simultaneously hosting features of the existing cryptocurrencies.
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