China files 80 patents related to digital currencies

By Yana Berman

New proposals highlight the country's intention to launch digital yuan

                                

The People’s Bank of China has filed more than 80 patents relating to its plot to launch a yuan-pegged digital currency, the Financial Times reports.

According to the patents seen by the FT, the filings are related to the issuance and supply of a central bank digital currency (CBDC). They also mention a system for interbank settlements that use the digital yuan, and the integration of digital wallets into existing bank accounts.

Some of the mechanisms described in the patents could allow citizens to make deposits in their current banks and then exchange them for digital currency.

Others are focused on further digital currency distribution, such as digital currency chip cards or digital currency wallets that are likely to be linked to bank accounts as well.

The documents were discovered by the US advocacy group Chamber of Digital Commerce. According to its president Perianne Boring, China takes the digital currency issuance very seriously and pours a lot of money into the project.

The recently filed patents confirm this point, as China is seemingly trying to integrate the digital yuan into its existing banking infrastructure.

Although some patents claim to grant a certain level of peer-to-peer privacy, there are no mechanisms to prevent the Chinese government from fully tracing the users’ transactions, the Chamber of Digital Commerce warns.

While China is preparing to launch its CBDC in 2020, its neighbour Japan is urging other countries to catch up with digital currency plans and to overtake them. Japanese ministers are worried about the possible Chinese domination of the virtual assets market.

Recently, Japan pushed the G7 members to discuss digital assets during the summit in the US this summer. Moreover, Japanese lawmakers will include digital yen development to the government's agenda for 2020.

FURTHER READING: Japan to add digital yen to its 2020 agenda

FURTHER READING: Japanese lawmakers push for digital currencies talks at G7

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