China integrates smart contracts on its digital currency

The Chinese government has released an official update about the latest development in its Central Bank Digital Currency (CBDC). 

According to the information it has released, the digital yuan will use virtual contracts to improve its “trustless feature” and make way for faster and more convenient transactions. 

Smart contracts have the capability to execute payments automatically through computer codes that are based on two sides’ agreements. 

It decreases the time-consuming and costly steps that are usually undertaken by two parties to ensure that both of them would honor the contract. 

A smart contract is known to operate within the boundaries of blockchain technology, but China hasn’t revealed if its digital yuan would also be based on blockchain tech. 

Digital yuan’s ‘security’ features

The government also said that the digital yuan, which it also calls “e-CNY” can be stored on security-chip-protected software and hardware wallets. 

It is also said that these wallets can also be integrated into other devices such as mobile phones, wearable gadgets, and the Internet of Things (IoT) to increase the e-CNY’s flexibility. 

The Chinese government, wanting to downplay privacy issues, assured the public that the digital yuan is a secured and private tool to use for payments. It said that its digital currency actually collects less transaction information than traditional payments. 

Started in 2014

Long before everyone was talking about cryptos and CBDCs, China has started exploring the potential of a digital currency way back in 2014. 

Since then, it has made a lot of progress when it comes to technology, scalability, and convenience. And while it hasn’t yet started a nationwide rollout of its digital yuan, indications are clear that China is ready to introduce a highly capable and global-ready digital currency. 

 

Image courtesy of Cointelegraph News/YouTube

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