The People Bank of China (PBoC) has just completed a top-layer design and the testing of its central bank digital currency (CBDC) that should be released very soon.
As reported by Chinese news outlet Sina on January 10, the tests and top-layer design for the digital Yuan were accomplished and developed according to relevant standards. PBoC carried out with the CBDC research, development and testing for a while now.
The latest developments were presented by the bank in a special article that also highlights its plans on improving the financial industry network’s cybersecurity and the rules for accrediting the most important information infrastructure.
Plans to Conduct CBDC Real-World Tests Revealed in December 2019
PBoC’s plans to conduct real-world tests for its CBDC were revealed in December 2019. The pilot project was set to be conducted in the city of Shenzhen by the end of last year, with the city of Suzhou possibly being included too. At the tests, the digital Yuan was expected to enter multiple service scenarios like education, transportation, medical treatment and others. Earlier in January 2020, PBoC said its CBDC is progressing smoothly.
Digital Yuan’s Encryption Standards
China has a law on cryptographic password management, a law that sets some standards when it comes to the management of passwords and cryptography. On Rand Corporation’s China professor of blockchain technology and policy analyst Sale Lilly’s opinion, this law complements the efforts and tasks that rolling out a CBDC require. This is what Lilly commented on the digital Yuan’s progress in relation to the importance of encryption levels:
“If China’s experience in trying to unify government cryptographic standards is anything like the U.S. Military’s experience, higher standards of encryption and trust scale users at a slower rate, so onboarding oracles and trusted agents for a private or permissioned access CBDC blockchain implies a natural trade-off between key security and speed of onboarding digital economy participants; banks, vendors, and a slew of Chinese government entities in tax and finance roles.”