Can CBDC run on the Ethereum network? Yao Qian says YES!

Yao Qian, science and technology supervision bureau chief of the China Securities Regulatory Commission (CSRC), says that a central bank digital currency (CBDC) can run on the Ethereum network during the spring conference of the International Finance Forum (IFF) 2021. 

Yao, affectionately known as China’s “Crypto Dad,” is regarded as one of the blockchain industry’s most powerful figures. He was the head of the People’s Bank of China’s (PBOC) digital currency research subsidiary until September 2019, when he was replaced by Mu Changchun.

When it comes to operational design, Qian believes a central bank digital currency (CBDC) may run directly on the Ethereum network or the Facebook-backed blockchain payment system Diem. 

“We can imagine that if the central bank’s digital currency runs directly on blockchain networks such as Ethereum and Diem, then the central bank can use their BaaS services to directly provide the central bank’s digital currency to users without using intermediaries.”

When researching and developing CBDCs, there are seven factors to consider according to him, including: The technical path, Attributes of high value,Interest accrual, Distribution, Operational architecture,Smart contracts being implemented and Regulatory concerns.

The official points out that a digital currency cannot simply be a mimic of actual money, arguing that smart money should be developed instead. He also mentions that the technology is yet to mature.

Ethereum, on the other hand, is still a relatively weak platform. Because Ethereum networks have smart contract flaws that need to be addressed. Aside from the technological issue, Yao advocates for a perfect balance between preserving user privacy and guaranteeing compliance with fundamental anti-money laundering and know-your-customer (KYC) rules when it comes to legislation.

He also clarified that he had just expressed his personal views and opinions.

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