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China’s New Cryptocurrency Needs No Bank Account for Transfers

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China’s New Cryptocurrency Needs No Bank Account for Transfers

A recent report published by the research team of Binance has disclosed that a bank account is not indispensable for a user of China’s Central Bank Digital Currency (CBDC). The report was recently published by Binance Research. 

Many Benefits

The report reads that CBDC users would be able to make transfers without bearing a bank account because of the loosely coupled design of the currency. A loosely coupled design of a system can be described as one where the components of the system which work in coordination with each other do not depend on each other and hence the failure of one could leave the others still intact. 

Since the main benefit of the system is that the users can transfer CBDC without a bank account, the same provides the user with a certain degree of anonymity. The other goals of this design system include a CBDC turnover rate equivalent to the cash, internationalization of the Chinese currency Renminbi and increased circulation of the currency. 

‘Basic Monetary Requirements’

A hazy term lurks over the proposal, that of ‘basic monetary requirements’ as the People’s Bank of China (PBoC) is thinking of making use of smart contracts in their infrastructure. As such, it is not completely willing to go beyond these ‘basic monetary requirements’, a phrase still not specifically defined. 

The bank is concerned with the possibility that with utilizing smart contracts, a kind of value would be added to CBDC and it would become more of a security. This would greatly impact its usability and hence become a hindrance for the goal of internationalization of the Chinese currency. 

Meanwhile, in Europe, earlier this year in May, a Central Bank official discussed the potential benefits of CBDC and also made note of the cautions which need to be taken in the case.

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I am a content writer with interests in life sciences and blockchain. I believe that blockchain has the potential to transform every aspect of human endeavor. I love surfing the internet, reading, learning new things, and trying new cuisines.

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