A recent report by Baidu has revealed a lot of details surrounding China’s cryptocurrency. According to the document, the country’s central bank will be the institution monitoring the digital currency. However, as expected, the ledger used for its creation won’t provide any kind of anonymity but rather allow the Government to monitor financial transactions closely.
Not Bitcoin: China’s Cryptocurrency Paves The Way For Further Control
China has been talking about issuing its own cryptocurrency for some time now. What is more, the Vice-Chairman of China’s Center for International Economic Exchanges (CCIEE) came out and said that they will be the first to launch it.
A few months later, a Baidu report reveals more information about the initiative, potentially hinting at the fact that they might be closer to its development.
Digging deeper into the report, however, reveals that one of the primary concerns that a lot of community members had, is, in fact, true. The country’s central bank will be able to monitor all financial transactions, while other parties wouldn’t.
“Unlike Bitcoin’s complete anonymity, the central bank has the right to know the transaction data within the legal scope, and traceability of digital currency sources can be achieved through big data analysis, while other commercial banks and merchants cannot obtain relevant information.” – Reads the report.
In other words, no other but the central bank of China would have access to the ledger in a way that permits them to monitor transactions. On the other hand, the institution would be able to see each transaction, while also looking at its amount and exact parties.
Not surprisingly, the report frames it as if it’s something that’s aimed at handling illicit activities.
“This mechanism, while protecting data security and citizen privacy, also enables illegal activities such as money laundering to be effectively regulated.”
A Central Ledger Used For China’s Cryptocurrency
The document outlines that there will be a distributed ledger that will be used to assist in the “registration of digital currency rights” and the processing will still be completed by it. This should, in theory, increase data security, while also handling the slower transaction times.
Interestingly enough, the cryptocurrency will be distributed by issuing banks, which would have to send a corresponding amount of fiat currency to the central bank, which, in turn, would send over the digital currency.