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China's Official Digital Currency – Key Features and Features

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In August, representatives of the People’s Bank of China announced that the country's sovereign digital currency was almost ready to launch after five years of development.

Mu Changchun, the deputy head of the payment department within the central bank, emphasized that a prototype digital currency (CBDC) was ready, and the department’s research group had fully worked out the blockchain architecture for him.

It is noteworthy that this statement was made shortly after the publication of the Libra documentation from Facebook . Thus, it is possible that the Chinese authorities saw a certain threat in the means of payment from the world's largest social networks and accelerated the arms race.

So far, the NSC has not published any official document detailing the operating principles and goals of launching the CBDC, and information from open sources is fragmented and often contradictory.

Nevertheless, we have studied publicly available information, including statements by experts close to the NBK, and we invite readers to familiarize themselves with the key characteristics of Chinese digital currency.

China's goal to get ahead of Facebook Libra (USA)

According to Wolfi Zhao of CoinDesk , the NBK has recently stepped up its efforts to create a new payment medium in the hope of getting ahead of Facebook with its Libra initiative.

Away from the central office of the regulator, a special team from the Digital Currencies Research Laboratory is working on CBDC. Work takes place in a closed environment at least since the beginning of summer, therefore, the team is fully focused on the project.

As already mentioned, much of the information about CBDC is still a secret. Also conflicting is the information on the launch dates of the digital currency, as well as on the participation of large Chinese companies in the project.

However, it has recently become known that the NBK can provide a unique right to use digital currency to seven organizations:

  • the largest financial institutions in the country – China Construction Bank, Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China;
  • Alibaba and Tencent conglomerates;
  • Union Pay international payment system.

One of the sources close to the NBK emphasized that the list of organizations could be expanded.

It is noteworthy that Tencent soon denied its participation in the project, and the People's Bank of China did not confirm the information on the timing of the asset.

It is possible that CBDC is positioned as a kind of “Chinese response” to Libra. The latter, according to the representative of the State Administration on Foreign Currencies of the People's Republic of China, Sun Tianqi, can significantly affect cross-border capital flows and become an obstacle to the internationalization of the renminbi.

A similar opinion is shared by the former head of the NBK, an influential economist Zhou Xiaochuan . He stressed that Libra could pose a threat to Chinese payment systems and the national currency, and also advised the Chinese authorities to take appropriate "precautions."

According to some experts , the Chinese CBDC is designed not only to become legal tender in the country, but also to promote the internationalization of the renminbi, which is especially relevant against the backdrop of an escalation of the trade war with the United States .

Key Features of Digital Currency

In one study, the Bank for International Settlements (BIS) proposed the “Money Flower” model, which characterizes various types of digital currencies of central banks.

According to the BIS classification, the NBK’s digital currency can be public funds and digital tokens of the central bank . Based on the April statement by the deputy director of the NBK Research Institute for Digital Currencies, Di Ganga, CBDC will be most consistent with the two categories of “Money Flower” highlighted in yellow.

In other words, the currency issued by CBDC will be centralized, but at the same time publicly available. The payment instrument will be used not only by the general public in retail transactions, but also in large interbank operations, as well as in settlements on securities.

According to Binance Research analysts, it is the centralized issue designed to provide CBDC with legal tender status and increase the efficiency of the NBK's monetary transmission mechanism . The latter is vested with absolute control over the new means of payment.

The Chinese CBDC will handle a two-tier monetary system :

At the first level, the NBK interacts with commercial banks directly, issuing and withdrawing from circulation CBDC. At the second level , as is customary in traditional finance, commercial banks interact with the public and organizations.

“With a two-tier digital currency system, the People’s Bank of China could achieve a replacement for paper money without undermining the foundations of the existing monetary system, which is also built on two levels,” said researchers at Binance Research.

Thus, in its essence and the most general principles of circulation, the Chinese digital currency will not differ much from the usual fiat money.

Why the Chinese financial system CBDC?

The People's Bank of China plans to replace the M0 monetary aggregate with new means of payment, that is, paper money and coins in circulation.

This could have a positive effect on the following areas:

  • Retail payments – the portability of money would significantly improve and anonymity at the user level would increase (according to the NBK);
  • Distributed registry technology will make interbank clearing more efficient;
  • CBDC is able to increase the speed and reduce the cost of cross-border payments , which would contribute to the internationalization of the renminbi.

According to Binance Research, with regard to M1 and M2, the NBK is confident that these money aggregates have already been transferred to the digital field.

Other reasons for CBDC's release by China's central bank :

  • Lower operating costs . In existing systems, the issue and maintenance of cash requires considerable costs.
  • Improving the effectiveness of anti-money laundering (AML) . As you know, cash is actively used in illegal activities, and the movement of funds in digital currency is much easier to track.
  • More effective counteraction to the outflow of capital from the country – the problem has become much more urgent against the backdrop of trade confrontation with the United States, a slowdown in economic growth and the devaluation of the renminbi.

Thus, the NBK CBDC is nothing more than an improved and much better tracked M0 monetary aggregate, potentially capable of reducing the volume of shadow and dubious operations.

Another important point is that instead of the partial reservation traditionally used in the banking sector , the Chinese CBDC assumes 100% collateral. This is perhaps the most dramatic change in monetary policy, since the current rate of required reserves in China is only 15%. As a result, the banking system loses the money multiplier .

Other components of monetary policy will not undergo drastic changes. Overall, however, the CBDC will clearly increase the presence of the NBK in China's financial system, increasing its impact on the economy. This is, in particular, stated in the aforementioned BIS report.

Holders of the new digital currency will not be charged interest, as is the case with deposits. Consequently, CBDC will be a highly liquid means of payment and, unlike funds held in bank accounts, free from credit risks.

Digital RMB Specifications

Binance Research experts argue that CBDC’s circulation mechanism involves the possibility of payments without having to open a bank account.

Coins will be stored in digital wallets, and the system itself will rely on cryptography and distributed ledger technology (DLT). Nevertheless, there are very few technical details in this regard. However, most likely, CBDC will be available through mobile applications, personal computers and smart cards .

As already mentioned, the digital currency will operate within the framework of a centralized two-tier system, the fundamental element of which will be the NBK. However, it is not yet clear whether the second level of this system will be based on DLT.

“Since the management of the second level will be delegated to financial institutions, the Chinese CBDC could potentially operate on the basis of several networks simultaneously ,” said Binance Research researchers.

Announcing the final stage of work on a new means of payment, Mu Changchun emphasized that CBDC’s productivity would reach “at least 300 thousand transactions per second”. This indicator is not yet available to any of the existing blockchains. On the other hand, such high performance can potentially be achieved with the help of off-chain solutions and other technical tricks like sharding and sidechains.

Also, according to representatives of the central bank, CBDC can operate using smart contracts. The latter, however, will provide functionality that does not go beyond the "basic monetary requirements."

According to the Research Institute of Digital Currency at the NBK, Big Data technology will become one of the key elements of the new system.

According to the scheme, big data technologies will be used to combat money laundering, tax evasion and the financing of terrorism, as well as to evaluate payment behavior. Of course, this implies ubiquitous personal identification (KYC).

Apparently, the NSC and second-tier financial institutions will have the ability to freeze any CBDC account at any time if suspicious activity is detected. It is also likely that the personal data of users will be tied to their wallets, which completely eliminates anonymity.

In addition, according to recent information , the digital currency will appear in WeChat and Alipay payment systems. At the same time, it will be possible to use it without the Internet. Mu Changchun emphasized that some mechanisms will be similar to Facebook's Libra.

When is the launch?

According to a September 4 China Daily publication, CBDC closed testing with "some commercial and non-governmental organizations" has already begun.
An earlier publication of the same publication says that if successful, the project will start even before Libra. That is, this will happen no later than the first half of 2020, and according to Forbes , it could even happen in November.

As already mentioned, the first users of the Chinese currency will be large state banks, as well as corporations Alibaba, Tencent and Union Pay. One of the sources close to the NSC confirmed that the above organizations are definitely involved in the project. Nevertheless, a significant part of the information is confidential and much remains unclear, for example, what is their role in this initiative.

According to the Chinese state publication Global Times , at first the new system will be launched locally in the city of Shenzhen. Tencent Holding is also located there, which, together with local financial institutions, will continue to develop a new means of payment.

It should be noted that earlier the NBK research unit opened an institute in Shenzhen specializing in financial technologies and projects related to digital currencies. This institution is now actively recruiting various technical experts, including blockchain developers and cryptography specialists, who will also work in Beijing. In addition, the NBK division filed more than 50 patent applications detailing the possible features of Chinese digital currency.

The position of other countries in the issue of national digital currency

The possibilities of central bank digital currencies are being studied in many countries, but it is unlikely that at least one of them has advanced as far as China.

For example, recently the head of the US Federal Reserve (Fed) Jerome Powell said that his department monitors the area kriptoaktivov, but has no plans to produce its own digital currency. According to him, CBDC is not a priority topic for discussion at the Fed and in general consumer demand for such a means of payment is insufficient, because "users already have many payment options."

In Ukraine, there is a pilot project to introduce the Electronic Hryvnia platform (e-hryvnia). The National Bank of the country is studying the advantages and disadvantages of digital currencies and the potential demand for them from organizations and individuals.

The head of the Bank of Lithuania Vitas Vasiliauskas is convinced that CBDC can act as a means of exchange, payment and preservation of value. He is also confident that state cryptocurrencies are able to increase the efficiency of payments and settlements on securities and reduce various risks in the financial market.

Nevertheless, representatives of some countries are skeptical. For example, the head of the German Federal Bank, Jens Weidmann, believes that cryptocurrencies issued by central banks can destabilize financial systems and worsen the work of credit institutions, especially in times of crisis. In addition, the demand for CBDC may negatively affect the efficiency of the central regulator and contribute to a fundamental shift in the business model of banks.

Avenir Suisse Analytical Center invites the National Bank of Switzerland to create the so-called franc token. Experts are sure that the new coin will facilitate the trading of tokenized securities, increase the efficiency of international payments and create new business models.

However, the president of the Swiss National Bank Thomas Jordan said recently that the currencies tied to fiatnym steyblkoiny may adversely affect the effectiveness of monetary policy and create risks to the country's financial stability.

A Bank of Russia report , “Is there a future for digital currencies of central banks?” States that state-owned cryptocurrencies can lower transaction costs and also work well in low interest rates and low inflation. In addition, interest can be accrued to accounts at CBDC, making such coins an attractive means of preserving value.

On the other hand, the document separately notes that “to date, there is not one successful, fully functioning and accessible to the general public CBDC, including working on the basis of data storage using distributed registry technology.

In general, about 70% of central banks in the world conduct research on the possibility of creating state-owned digital currencies, but only a few of them have started implementing projects.

findings

It is expected that the Chinese CBDC, designed to replace cash, will be provided with reserves in the ratio of 1: 1. Its issue will be exclusively the NBK and, therefore, the value of the currency will be based on the confidence of the population in the central regulator, the financial system and the economy as a whole.

A bank account is not required to use CBDC, but it is likely that verification of identity is required.

The digital currency will be traded as part of a two-tier monetary system:

  • central bank ↔ commercial financial institutions
  • commercial banks ↔ organizations and individuals.

The first level of the system is an exclusive (permissioned) blockchain. However, it is not yet clear on which technology the second level of CBDC is based.

The launch of the digital currency can provide a number of advantages from the point of view of the NBK:

  • The possibility of a more accurate calculation of macroeconomic indicators, for example, inflation.
  • Expanding the possibilities of collecting real-time information on the features of CBDC circulation, which may be useful for the implementation of monetary policy.
  • Prevention of money laundering, terrorist financing and tax evasion, in particular, through the use of Big Data.
  • Reducing information asymmetries between financial institutions and regulators.

In general, CBDC implies a much more significant role for the NBK in the economy and eliminates the financial confidentiality of users. At the same time, it is not completely clear under what circumstances funds in the wallets of Chinese users can be frozen.

On the other hand, completely rid of anonymity and a centralized CBDC can hardly be considered a direct competitor to existing cryptocurrencies such as Bitcoin, Litecoin, Monero, etc. The latter will increasingly compete with fiat money, which will cause serious changes in the monetary policy of regulators and banking systems of various countries, as well as further tightening the regulation of the crypto industry.

Publication date 09/10/2019
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TRON (TRX) cryptocurrency review – forecasts and prospects, current rate

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Cryptocurrency TRON (TRX) is a decentralized protocol based on blockchain technology designed to create a global entertainment network with free content.

In simple terms, TRON is a service similar to all well-known social networks and platforms where users have the opportunity to publish, view and use any available content for entertainment, for example, online games.

The TRON project is currently developing the idea of joint consumption, which is that on a single global platform, users will be able to share entertainment content.

Official TRON cryptocurrency website: https://tron.network

Analysts call this platform the broadcast of the modern entertainment industry. In general, the functioning of this system is as follows:

  1. The author or copyright holder publishes the result of his intellectual work on the official website. You can download anything from literary novels to an author’s song or art on a specific topic. Next, the participant uploads information about how his creation can be used (as an accompaniment to another work or as an independent product). Nearby, he indicates the price of his work.
  2. Another user who is interested in this work acquires it for the local currency Tron (TRX). However, users should remember that it is impossible to purchase this or that product on this resource using fiat money (dollar, euro, rubles, etc.). The system has its own cryptocurrency , which must be purchased at exchangers or exchanges in order to complete a transaction.
  3. As soon as the interested user has acquired the result of intellectual work, the amount indicated by him is transferred to the author’s account. The author can use the tokens at his discretion – purchase a work from another author, simply save money in his account, or exchange it for another cryptocurrency or fiat funds.

About what TRX is, initially interested in all users who are just starting their activities on the site. This resource uses several types of tokens for different purposes:

  • Tron (TRX) . This is the main currency of the system. For this currency you can buy or sell the results of your intellectual work. If necessary, the owner of a certain amount in this currency can exchange it for fiat money or other cryptocurrency.
  • Tron Power It is impossible to purchase or exchange other money for a given currency. The only way to get them is to secure the TRX currency on the site platform. In this case, they are converted to TR. The presence of such tokens gives advantages to their owner. For example, the holder of a TR has the right to vote for one or another change in the system, or to oppose them.
  • TRON 20 . Coins owned by developers. With the help of them, they create new full-fledged blockchains with new tokens.

The TRON cryptocurrency issue is limited, 100 billion coins have been issued at present. However, it is worth considering another point – starting in 2018, tokens begin to be burned (they are meant to be forwarded to an address known only to developers). The last major burn was in June last year, but how often such procedures will be carried out is currently unknown.

project team

The team of this project has on its side professionals working in various fields. The founder of the platform and the creator of TRX Coin is Justin Sun , who also created a social network with an audience of 10 million people. In 2017, Forbes magazine included Justin on his list as one of the most successful entrepreneurs, who was not yet 30 years old.

The technical director of the project is Lucien Chen , who has extensive experience in working for large Internet companies. He is perfectly versed in blockchains and the principles of functioning of cryptocurrencies.

Deus Yu , responsible for quality control, has been working in the computer games industry for a long time. According to Justin Sun, the experience of Deus will come in handy a little later, when the platform gains even greater popularity.

Charles Zhang , an adviser who is well versed in a business not related to cryptocurrencies and blockchains. He has repeatedly lectured on the basics of entrepreneurship, with which he was invited to many universities. Charles made a huge contribution to the promotion of the platform at the initial stage.

Blockchain Browser

Block Explorer is a search tool that allows you to view the addresses of wallets involved in the system, blocks, as well as data of transactions completed or committed. It can be compared with standard browsers, with the help of which an ordinary user searches for the information he needs on the Internet.

For each cryptocurrency, a personal Block Explorer is created that shows the network status for a given period of time. For the Tron cryptocurrency, such a Block Explorer is called TRONSCAN , where users can get all the information they need ( https://tronscan.org ).

How to mine Tron?

The developers of the platform did not provide for mining the Tron cryptocurrency , since they had already created all the necessary coins. In addition, the creators talked about the scheme according to which their cryptocurrency will work:

  1. 40% of the total number of coins will go on sale to enable the project to develop further.
  2. 15% of the remaining amount is allocated for acquisition by investors. Investors are players who, after the main sale of coins, will be ready to purchase tokens further.
  3. The remaining funds are “frozen” and remain in the accounts of the company owners.

Justin Sun explained that perhaps mining will be provided in the future when the company gains the necessary popularity.

TRX Token Wallets

The user can choose one of two options for storing Tron coins (TRX):

  • Storage of tokens on the exchange;
  • Creating your own crypto wallet.

With proper use, wallets provide a higher level of security. All types of wallets for Tron (TRX) are described in detail in this review .

Buying and selling TRX coins

You can buy a Tron on popular crypto exchanges , we recommend that you use the first 15 exchanges, and do not forget to install additional account protection. On the selected exchange, you must go through the registration procedure, after which you will be given a personal wallet, as well as its address.

The most popular and safe exchangers where you can buy and sell Tron:

The exchange rate of the Tron cryptocurrency against the ruble as of October 28, 2019 is 1.29 rubles per 1 coin. For a detailed analysis of the course and chart of coins, we recommend that you look at the Coinmarketcap website.

Development Perspectives and Company Roadmap

A distinctive feature of the project is its roadmap, which is scheduled until 2027. It is divided into several stages:

  1. Exodus It lasts from 2017 to 2018 and is considered officially completed. During this period, information about the project was actively disseminated, as well as developers were engaged in improving tools for using the site.
  2. Odyssey . Accounted for 2019-2020. During this time, developers will pay special attention to the economic development of the platform.
  3. Great Voyage . Captures July 2020 and ends in July 2021. Implementation of a personal ICO system, and third-party developers will have the opportunity to launch their own ICOs.
  4. Apollo It lasts from March 2021 to March 2023. Creating a decentralized exchange platform.
  5. Star Trek . It begins in April 2023 and ends in September 2025. Creation of a decentralized platform for the development of any computer games.
  6. Eternity . It starts in September 2025 and ends in September 2027. Platform users will have the opportunity to create their own playgrounds.

The developers mentioned that if these plans are implemented, a new roadmap will be created in the future, which will begin in 2028.

When analyzing the active nodes of the Tron cryptocurrency, you can notice the scale of the development of the project, where the majority of servers are located in the USA, China and Germany.

The forecast for Tron cryptocurrency from leading analysts suggests that, taking into account the current features of the crypto asset, in the future the project can absorb the entertainment market. And this means that in 2020 the value of one coin is able to stand on one level with the dollar.

Main competitors Tron

The project has two main competitors – Qtum and Ethereum . Each competing company has its own advantages, for example, the first has a more advanced platform in terms of technology, and the second wins due to smart contracts and fame.

Analysts are confident that the Tron platform will still have to fight for its users, since the developers are aimed at a specific audience. However, the Throne does not have special advantages that would distinguish the project from its competitors, which could become a serious problem in the future.

Conclusion

Tronix cryptocurrency has good prospects for further development, since the project itself is one of the most ambitious among others. However, at present it is not in demand. Investing in such a project will bring quite large risks, however, long-term investments can bring the investor good profit.

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The largest exchange Binance has the opportunity to deposit / withdraw deposits in rubles

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The Binance cryptocurrency exchange this Wednesday activated the possibility of making deposits in Russian rubles.

According to the instructions provided on the website, deposit / withdrawal of funds is carried out through the AdvCash payment system , including using bank cards. The commission for the deposit in this case is 3%, for the withdrawal – 2.5% plus 50 rubles.

To deposit / withdraw assets in rubles, you need to go to the “Buy cryptocurrencies” tab in the upper control panel or select the “RUB” currency in the user's wallet, then indicate the desired direction of payment and other necessary data.

Trading pairs for exchanging the ruble for cryptocurrencies on the Binance platform have not yet been presented.

Earlier today, CoinDesk published excerpts from a conversation with Binance CEO Changpen Zhao during his visit to Moscow last week.

“We are always looking for partners in any community, especially in Russia. Russia is a key market for us, it is one of the most active markets in the global blockchain space, ” he said then.

Zhao also confirmed that Russia is included in the Venus project, in which Binance intends to launch several regional stablecoins.

“We are working with potential issuers of stablecoin tied to fiat currency. We do this in all jurisdictions, in Russia in particular, we are looking for partners, ” he added.

Last week, Binance listed its first cryptocurrency pairs on its main platform, starting with Nigerian naira. The exchange also supports fiat trading at selected sites in Uganda, Singapore, the United States and Jersey.

Publication date 10/30/2019
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Technical analysis: the cryptocurrency market is ready for a new growth wave

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RoboForex lead analyst Dmitry Gurkovsky talks about further possible scenarios of the price movement of bitcoin and several popular altcoins .

Buyers managed to show a good bounce up. At the moment, assets such as Bitcoin and Bitcoin Cash look very interesting in the context of continued growth. Moreover, if the BCH / USD chart shows the formation of a reversal pattern of the inverted “Head and Shoulders” in favor of growth, then BTC is just getting ready to leave the channel and continue a confident upward movement.

Unfortunately, the assets of Ethereum, Litecoin and EOS are still under pressure. There are several signals from daily charts in favor of moving down. However, if the bulls manage to break through the next resistance levels, then these assets will be ready to move to the phase of sustainable growth.

In general, the cryptocurrency market looks ready for the start of a new wave of recovery. The bulls can only hold the current levels and rise a little higher to deprive the bears of all chances to continue the downward correction.

Bitcoin (BTC)

Quotes showed an aggressive rebound from the support level. However, the price tested resistance in the form of a downtrend near the $ 9800 area. To continue the rise by the buyer, it is important to “push” prices even higher.

A good signal in favor of a likely continuation of growth is the breakdown of a downward trend line on the RSI indicator. In most cases, a return to the broken line occurs, after which we should expect continued growth. As the main trading idea, you can take a slight correction to the level of $ 7700, after which you can talk about a rebound and upward movement.

Cancellation of this option will be a fall in the quotes of the digital asset below the level of $ 6875, which will indicate a breakdown of the lower boundary of the channel and continued decline.

On the 4-hour chart, cryptocurrency quotes were able to leave the limits of the short-term downward channel. Such a signal is the first sign of a potential reversal of the current downward correction. However, confirmation of the completion of the fall will be a strong growth with consolidation above the level of $ 10,995, which will indicate a way out of the downward channel. In this case, the target of the movement will be the area of $ 12,405.

The values of the RSI indicator again pushed off the resistance level, so we should expect a decrease and a test of the broken channel boundary. After this movement, we can talk about the beginning of growth towards the goal at the level of $ 10,995.

Ethereum (ETH)

Ethereum buyers also managed to keep quotes in the support area, which is located at $ 147. At the moment, the price has once again returned to the area between the moving averages, which may provoke an attempt to further decline.

In favor of this option is a rebound from the downward resistance line on the RSI indicator. As the main idea, we should expect a rebound from the lower border of the rising channel and the continuation of the fall to the first target at $ 147. Its breakdown will open the way for the movement of quotations to the level of $ 100. Cancellation of the negative option will be a breakdown of the Moving Averages and the consolidation of ETH / USD above the level of $ 239. In this case, we can talk about continuing the rise to the goal at the level of $ 280.

On a 4-hour chart, quotes are clamped in a downward channel. The values of the RSI indicator are testing the resistance line again, so we can expect a rebound and fall in the quotes of the digital asset to the level of $ 150.

In favor of this option, a test of the upper boundary of the downward channel will also come forward. Cancellation of the proposed forecast will be a breakdown of the resistance level and consolidation above $ 202, which will indicate the exit of quotes beyond the rising channel. In this case, the target of the rise will be the level of $ 239.

Attention!

Forecasts of financial markets are the private opinion of their authors. Current analysis is not a guide to trade. RoboForex is not responsible for the results of work that may arise when using trading recommendations from the submitted reviews.

Publication date 10/30/2019
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Name Price24H (%)
Bitcoin (BTC)
$8,836.00
1.29%
Ethereum (ETH)
$168.59
3.37%
XRP (XRP)
$0.231787
1.53%
Bitcoin Cash (BCH)
$340.02
4.98%
EOS (EOS)
$3.89
5.56%
Stellar (XLM)
$0.056531
5.68%
Litecoin (LTC)
$59.07
4.07%
Cardano (ADA)
$0.042351
2.71%
Tether (USDT)
$1.00
0.12%
Monero (XMR)
$65.95
1.03%
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