Digital yuan will be stored in the electronic wallet in the mobile app, while in fact you can use them just like regular “paper” currency. And this is the fundamental difference from the cryptocurrency Bitcoin and Libra: Chinese digital currency is not aimed at storing, and the incoming and outgoing payments, which also may be carried out offline.
Active work on the creation of a digital currency based on blockchain technology China leads in 2017. In October 2019, the Chinese President XI Jinping said that the need to increase investment in the development of the blockchain, to take a leading position on the wave of industrial and technological transformation. The very next day China adopted the law on cryptography is a key element of the blockchain to ensure its operation and safety.
In April, for mass implementation of this technology, China has formed a national Committee on the blockchain and standardization, in which will participate the largest technology company, Ant Financial, Huawei, Tencent, Baidu. Another major initiative of China – the creation of reliable, inexpensive and widely available platform for blockchain services with an extensive cloud-based data store (Blockchain Service Network, BSN). It is produced in collaboration with UnionPay (operator of the national payment system of China) and China Mobile (the world’s largest mobile operator).
the Blockchain in China already use more than 70 companies offering financial services, including all state-owned banks. Banks use technology in trade financing, supply chain management, issuance of securities, equalization payments, etc.
In parentheses we note that China has already demonstrated the ability to quickly scale breakthrough payment technology. So, mobile payments via QR-code (which only applied in Russia) and the translation directly in the messenger WeChat have become a daily routine for hundreds of millions of Chinese. The ability to “jump over” some steps are typical for many countries catching up with technology leaders. For example, thanks to this Russia the rate of growth of non-cash card transactions for many years (according to BCG, 2010) is ahead of all European countries.
Explains the General Director of the Association of FINTECH Tatiana Zharkova:
– If you omit the technical conventions, we can say that people used the blockchain for a long time. Imagine: you live in a small village you have a house and a certain number of neighbors. But one day a long time you went hunting or went to work. And at this time the village came a stranger and live in your empty house. Now, when you come back, how to prove that the house is yours? You ask the other inhabitants of the village confirm that this is where you lived. And one by one they confirmed that the house belongs��behind you, and even I can tell you that before he took your grandfathers and great grandfathers. This is the principle of the blockchain: all members of the chain (your villagers) store information and confirm every change (change of generations in your home) to finally confirm the correctness of the final operation (the house belongs to you).
the Blockchain is an extensive digital database (distributed registry) that stores information about each transaction, each step of the network participants. Participants can be individuals or legal entities, government agencies and various enterprises. Information and transactions are recorded in the blocks, and the blocks are written to a line referring to each other – hence the name blockchain, that is, the “block chain”. The computers in this network are equal independent nodes, i.e. there is no Central computer, monopolize the whole amount of information that could be bait for a Scam. The actions and movement of information protected by cryptographic Protocol – unique set of letters and numbers, the date of the transaction and electronic signature.
the Simplest example is “Wikipedia”. Everyone can view the change history of a particular page since its creation. And any changes are immediately available for viewing to all visitors. But if the Wikipedia site only stores the text and images, the blockchain can store many types of information: the history of ownership, movement, and storage values, ownership, contracts, personal data.
Now the main users of the blockchain are the large companies and corporations. In the financial sector technology simplifies money transfers and improves the accuracy of operations. Banks blockchain helps with the conclusion of contracts, registration of transactions and verifying that customer’s identity. Trade and logistics enables to track the path of the goods from the manufacturer to the storefront. This is particularly important where the authenticity of the product is critical, and the volume of counterfeiting is very high – for example, the sale of medicines or luxury goods. So, the concern LVMH (which owns brands Christian Dior, Louis Vuitton, Givenchy, Hennessy, etc.) in partnership with Microsoft and ConsenSys has launched a blockchain-based platform for authentication of their products.
Remember, as you wait for SMS notification from the delivery service confirming that the courier picked up your order, and then follow up app his movements to your home. Now imagine the same, but the scale of companies, cities, countries and continents.
the Technology of distributed registry was included in the list of key areas in the national programme “Digital economy”, while it is considered a cross-cutting technology affecting different areas and industries.
for Example, blatche��n use the Federal registration service (for the registration of agreements of participation in shared construction), the Metropolitan service of online voting on the Active citizen. The project on the blockchain for the sale of tickets developing Alfa-Bank and S7 Airlines, a network of “Dixie”, with this technology interacts with its suppliers.
Another major project is the registration and storage of electronic mortgage system with a decentralized Depository system (DDS). DDS are already using Sberbank, AK bars Bank, Gazprombank, Raiffeisenbank and others. The system is implemented on a blockchain platform Mastercan development Association FINTECH, which first passed the certification in FSB. In the future, DDS will be used not only for mortgages but for other types of securities.
