The report claims the People’s Bank of China (PBOC) central bank’ s digital currency (CBDC) will be backed 1:1 by renminbi fiat as well as follow a two-tiered structured system with the bank, commercial banks, and retail market participants, according to CoinDesk.
The first tier will connect the PBOC with commercial banks for currency issuance and redemption, while the second one will connect those commercial banks with the greater retail market. Binance claims the PBOC’s system could allow fund transfers without the need for a bank account.
The two-tiered system could help the Chinese central bank process as many as 300,000 transactions per second, currently not possible with blockchain technology. Binance said smart contract architecture has also been discussed. As a result, a technical roadmap, including the questioned use of blockchain technology, has yet to be published, Binance added.
The PBOC’s CBDC is purposed with replacing China’s notes and coins in circulation, and it is not meant to replace funds within the central bank or money holding institutions.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now