- China’s DCEP is currently the world-leading CBDC in terms of development.
- DCEP can be programmed through smart contracts to build Dapps.
China’s Central Bank Digital Currency (CBDC), dubbed the Digital Electronic Payment (DCEP) and the world’s most advanced CBDC project, is set to be rolled out during the 2022 Beijing Winter Olympics officially.
DCEP is a centralized cryptocurrency issued by and managed by China’s central bank, the People’s Bank of China (PBoC). It leverages several blockchain-based technologies, including cryptography, UTXO, Public-key, Smart Contract, and Digital wallet.
DCEP main features
DCEP supports dual offline payments for Renminbi and is issued through a double-tier system. It is also designed to support anonymity between transacting parties but at the same time capable of tracking financial transactions and combating money laundering.
Over 3,000 ATMs in Beijing currently support deposit and withdrawal features for DCEP. The process is operated by the Industrial and Commercial bank of China ICBC. ICBC is one of the six state-owned banks in China that are mandated to issue DCEP to the public.
The project was officially launched in 2018, but according to sources, China has been working on a digital currency project since 2014. Throughout 2020, DCEP gained significant popularity in mainstream and Cryptocurrency media for performing extensive tests on DCEP’s integration in different cities and on various uses cases, including in public transport, utility payments, and food delivery payments.
Most notably, in 2021, The PBoC partnered with the Hong Kong Monetary Authority, the Bank of Thailand, and the Central Bank of the United Emirates to test DCEP for cross-border payments. Additionally, DCEP is testing a new feature to avail transactions through a hardware wallet in the form of a card. The Postal Savings Bank debuted the feature to allow less-tech savvy Chinese to participate in the DCEP economy.
Dapps are possible on China DCEP
Several industry experts from China agree that DCEP has a programmable capability that would allow developers to leverage smart contract technology to build decentralized applications (Dapps) in DeFi and other economic sectors.
According to Yan Meng, vice president of Chinese Software Developer Network (CSDN), the design of DCEP preserves a programming functionality, which is called ‘script’. Its designers plan to make the digital currency programmable in the future. This means that if someday Chinese regulators decide to open up DCEP’s programming functionality to the public, it would be fantastic news for the cryptocurrency community.
Blockchain developers could easily take advantage of integrating DCEP into a host of Dapps, especially DeFi apps. This would allow a much broader range of people to be involved in the Cryptocurrency economy.
In support of these sentiments, Ken Huang, co-founder of Metaverse DNA, said that DCEP’s programmable nature makes its impact quite significant.
Thanks to DCEP’s Programmable nature, leveraging smart contracts, one can build applications on top of DCEP for various real-world use cases.
Such applications would include government subsidy, taxation, trade finance, cross-border payments, and charity donation tracking.
I see there will be gradual adoption for a few years and a sudden surge of use cases and wider adoption in about 5 to 10 years time frame.
Kong concluded that while DCEP may not be open to working with other decentralized currencies or ecosystems, it will play a significant role in how other central banks will choose to develop their CBDCs.
From a short-term perspective, the significance might be rhetoric, but it might marginally improve the way how Chinese society functions and how people are governed.
The International Bank for Settlements, a consortium of central banks worldwide, already said in 2020 that 80 percent of central banks are either researching or developing CBDCs.
Central Bank of Spain requires cryptocurrency companies to register in the country
The Bank of Spain (BDE) made available on Thursday (21) an electronic form for registering individuals and companies wishing to initiate or formalize operations with cryptocurrencies. The call comes a week after the agency formally sent a notice on the subject to the country’s financial institutions.
According to the BDE, registration is mandatory for companies operating in the cryptocurrency sector, regardless of whether they already have registration with the country’s central financial agency, that is, even banks. Such a requirement could confuse financial entities already licensed in Spain, as they are already directly supervised, Coindesk commented.
“The obligation to register in this form applies to all individuals or legal entities that provide exchange services between virtual and fiduciary currency and custody, regardless of whether they are also registered in other administrative records at the Bank of Spain or other competent authorities”, says a short excerpt from the BDE instructions.
Another point is what clarifies the BDE about the registration of individuals who work in the exchange service in Spain, such as P2Ps. Something that the central bank makes clear is that these actors must register “regardless of the location of the service recipients”. However, both individuals and corporations will have to adapt or revise their money laundering policy.
Entities now have one week to start the registration process and deliver documentation. The BDE advises that “it is advisable to submit all documents complete from the start to avoid delays in processing the order”.
Cryptocurrencies in Spain
About four months ago, the BDE said it would provide instructions and the necessary forms to apply for registration. But the instructions have only just arrived, with just 7 days to go before the registration deadline.
Another point of action by the BDE is the lack of clarity, since the entity works as the country’s central bank, but under the supervision of the European Central Bank (ECB).
The Spanish bank BBVA, for example, already has a bitcoin trading and custody service in Switzerland. CaixaBank, the third largest Spanish bank, is also preparing to explore the cryptocurrency sector with startup Onyze.
This Is What Jack Dorsey’s Cryptic ‘705742’ Tweet Might Mean
A simple but cryptic tweet from Jack Dorsey, Founder and CEO of Twitter and payments firm Square, has sparked a debate about the meaning of the post, and whether the well-known Bitcoin (BTC) advocate has any BTC-related plans that have yet to be announced.
As pointed out by many users replying to the thread, the tweet, saying just “705742,” likely refers to a block number on the Bitcoin blockchain. A block with that number was indeed mined on Tuesday at 20:14 UTC, but it is still unknown what else is special about the particular block.
Been updating block explorer for the last 7 minutes— Katie The Russian (@KatieTheRussian) October 19, 2021
Twitter users were quick to pull up the bitcoin block explorer to see if there was anything unusual about block 705742, which at that point had yet to be mined. However, little out of the ordinary could be found.
Others, meanwhile, joked that the number could be Dorsey’s “[end of year] price target for bitcoin,” or that it could be somehow related to “Moscow time,” – bitcoin slang for the value of 1 USD in satoshis.
Speculating further, one user on Reddit suggested that the block number could be the first block to be mined by a new mining system that Dorsey has proposed.
“Maybe the first block that Square mined as part of their [research & development] for a potential public mining platform,” the user wrote, before adding that it looks like the wallet that received the block reward already has both in and outbound transactions worth almost USD 2bn. “Seems like a plausible volume for Square/Cashapp,” the user added.
However, according to various Bitcoin blockchain explorers, the block in question included 2,787 transactions and was actually mined by the BTC.com pool. Moreover, the block was mined almost an hour after the tweet was published.
In either case, as reported, the latest tweet from the Twitter CEO followed another thread from last Friday, where Dorsey said that Square is considering building “a bitcoin mining system based on custom silicon and open source.”
“Mining needs to be more distributed” and it “should be as easy as plugging a rig into a power source,” Dorsey wrote, asking his followers what the biggest barriers are for people who want to run miners.
Facebook Finally Launches Digital Currency Wallet Novi but Senators Want to Close This Project
Amid the Facebook Novi launch, some federal legislators want the social media giant to discontinue the project.
Facebook Inc (NASDAQ: FB) has launched the pilot phase of its digital currency wallet Novi in the US and Guatemala using stablecoin Paxos. Facebook finally launches Novi and is going with Paxos’ USDP after its own native crypto Diem failed to secure regulatory approval. Furthermore, the social media giant heralded the pilot launch in a blog post on Tuesday.
Novi’s pilot launch is more than two years after it was first announced. The wallet will facilitate fast, secure, and free fund transfers between users via mobile smartphone apps. However, all users must register with government-issued identification.
For now, Paxos’ stablecoin will serve as Novi’s transactional currency, while powerhouse exchange Coinbase will provide custodial services. According to David Marcus, head of Facebook’s Novi wallet, this pilot phase will, “test core feature functions, and operational capabilities in customer care and compliance.” Furthermore, it will test the viability of stablecoins as a valid and sustainable form of payment.
Facebook Launches Novi to the Disapproval of US Congress
Amid the Facebook Novi launch, some federal legislators are calling for the social media giant to discontinue the project. Senate Democrats addressed a letter to Facebook CEO Mark Zuckerberg on Tuesday questioning the company’s credibility with crypto. In their own words, Facebook “cannot be trusted to manage cryptocurrency”. The senators base this conviction on the social media company’s past inadequacies in handling cyber risks and keeping consumers protected. Signed by Senators Brian Schatz, Sherrod Brown, Elizabeth Warren, and others, the letter read:
“Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape — not only for Diem specifically, but also for stablecoins in general.”
Part of the Congress letter to Facebook further states:
“We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market.”
Facebook responded to the Senators’ query through a spokesperson for Novi, suggesting that the company would address the issues raised therein.
Facebook Has a Long-Running History with Federal Lawmakers over Its Operational Practices
In recent times, Zuckerberg and Facebook have locked horns more frequently with Congress. Back in 2019, Congress summoned the Facebook CEO to provide testimony on the Diem project (then called Libra). Zuckerberg’s summoning was the culmination of weeks of tussling, between Facebook and the federal lawmakers, who were skeptical of the project. In addition, the Zuckerberg hearing came just a year after Facebook’s Cambridge Analytica scandal. This may have been another reason federal legislators were agitated against the company.
Another recent red flag raised against Facebook was earlier this month from whistleblower Frances Haugen. Haugen appeared before the Senate Commerce Committee to testify on the threat Facebook posed to users. Some of these include the usage of Facebook itself and other affiliated services, such as photo and video-sharing behemoth Instagram.