Blockchain Won’t Be Involved in China’s CBDC “Initially”

• Vitalik Buterin took to Twitter to ask his followers whether transactions using CBDCs would be provable on a cryptographic scale.
• This comes off after China recently proposed its own central-bank digital currency.

At the start of February, the co-founder of Ethereum, Vitalik Buterin took to Twitter to ask his followers whether transactions using CBDCs would be provable on a cryptographic scale. This comes off after China recently proposed its own central-bank digital currency.

Important tech question about these CBDCs that are starting to pop up (CC @mg0314a): will transactions be cryptographically provable? That is, if I send you N coins, can I generate a cryptographic proof that this happened that can be verified on the ethereum chain? ...

— vitalik.eth (@VitalikButerin) February 4, 2020

According to the popular co-founder, if this was to be the case, Ethereum would have to run on a light client of the central bank digital currencies. Ever since it was announced by China to launch its own cryptocurrency backed by the state, not many details on the ‘DCEP’ has been revealed to the general public. Going off to this, the whole project is a complete unknown.

Reports have highlighted that the People’s Bank of China has integrated a system to keep track of the funds from its customers. It is will use big data analytics in order to process and collect information in regards to transactions on the network. Furthermore, the results of this data could be used to shape monetary policy in real-time.

The CEO of Sino Capital, Matthew Graham responded to the queries and questions posed by the co-founder. He went on to say that he had been talking with “friends in leadership positions directly on China’s DCEP team.”

“In the first step, CBDC will be not necessarily related to blockchain.”

Graham went on to add that DCEP will be designed as a substitute for M0. Furthermore, it would have similar attributes to its fiat currency.

It will be interesting to see how this plays out. For more news on this and other crypto updates, keep it with CryptoDaily!