The People’s Bank of China (PBOC) has recently published an e-CNY whitepaper for the CBDC of the country and has confirmed the smart contract programmability. A whitepaper has been issued by PBoC on Friday for its digital yuan project.
People’s Bank of China (PBOC) Releases First e-CNY Whitepaper
The recent issuance of the whitepaper which is dubbed the e-CNY significantly confirms that the digital fiat currency is designed to be programmable with smart contract features, but it has not set any concrete roadmap for an official launch by PBOC.
Talking further about the whitepaper, it describes the background, features, and performance of the e-CNY initiative that began back in the year 2014.
"Adopting Blockchain and encryption technology, cryptocurrencies such as Bitcoin are claimed to be decentralized and entirely anonymous. However, given their lack of intrinsic value, acute price fluctuations, low trading efficiencies and huge energy consumption, they can hardly serve as currencies used in daily economic activities. In addition, cryptocurrencies are mostly speculative instruments, and therefore pose potential risks to financial security and social stability."
In addition to this, the PBoC mentioned the use of stablecoins in place of cryptocurrencies to tackle the volatility in the crypto market and said:
"To tackle the relatively big price fluctuation concern of cryptocurrencies, some commercial institutions launched so-called 'stablecoins,' and tried to stabilize their values by pegging them to sovereign currencies or related assets," the central bank continued. "Some commercial institutions even plan to launch global stablecoins, which will bring risks and challenges to the international monetary system, payment and clearing system, monetary policies, cross-border capital flow management and etc."
Smart Contracts Programmability to be the Major Feature
As mentioned in the section about the design characteristics of e-CNY, smart contracts programmability is one of the major features and while addressing this, the PBoC wrote:
"E-CNY obtains programmability from deploying smart contracts that don’t impair its monetary functions. Under the premise of security and compliance, this feature enables self-executing payments according to predefined conditions or terms agreed between two sides, so as to facilitate business model innovation."