A new report from Binance Research claimed that China’s proposed Central Bank Digital Currency (CBDC) can be used even if the cryptocurrency owner has no bank account.
China’s prospective digital tender is said to be supported with 1:1 fiat reserve. It also boasts of encryption and easy to manage anonymity features.
According to the research group of the Binance crypto exchange platform, the Asian powerhouse’s CBDC is transferable even without a bank. The researchers say this is possible because the currency utilizes a loosely coupled design, which is a structure of components that don’t rely on each other.
The way the system is designed enables users to move the CBDC without depending on a bank account. It was also developed to provide the user with a level of anonymity, encourage a CBDC turnover count equal to that of cash and to improve the circulation of the renminbi on the international stage.
Binance Research also posits that the People’s Bank of China (PBoC) is thinking of integrating smart contracts in their framework but is wary about implementing something that would go beyond the “basic monetary requirements.” The bank is yet to determine what requirements they’re considering.
The report stated that the PBoC is worried that if they execute smart contracts that bring additional value to the digital currency, its offering will end up becoming a security. This will lessen the crypto’s usability and hinder the bank’s aim of the RMB expanding its global reach.
There’s still no definite date on when China’s CBDC will be launched. Previous reports mentioned a November timeline, but the PBoC has dismissed the news and said it was just “inaccurate speculation.”