China on the blockchain? 2018 see the outcome

nRunaway Comment: Chun Yin Cheung is a Risk Assurance business partner at PricewaterhouseCoopers Shanghai office and a member of the Only Chain Foundation. This article is the exclusive feature article for the 2017 Column of CoinDesk Review. In this article, the author believes that China will be the first major country to introduce CBDC in 2018, and we will also see the implementation of large-scale blockchain in the retail and logistics industry and the development of blocks for Chinese enterprises Chain solutions will play a decisive role.n
nTranslation: Clovern
In 2018, I expect China (again) to surprise the world and bring about changes in the cryptography.n
I personally think that China will become the first major country to launch the CBDC in 2018 and we will also see the implementation of large-scale blockchain in the retail and logistics industry and will use the areas developed by Chinese enterprises Block chain solution.n
Now, let me analyze my above forecast.n
China’s CBDCn
Although China completely banned the cryptocurrency exchange in September of this year, the country has always been positive about the digital currency and blockchain in the central bank and is actively conducting relevant research.n
For example, in February 2016, Zhou Xiaochuan, governor of the People’s Bank of China (PBOC), admitted in an interview that the Chinese government has long been studying the adoption of CBDC. As of December 27, 2016, the blockchain was written into the “13th Five-Year Plan for National Informatization”. The Chinese government has confirmed the value of the blockchain and has since risen to the national science and technology strategy.n
Technically, China is ready to launch the first CBDC, as the People’s Bank of China set up a dedicated digital currency research group in 2014 to study the digital currency issuance and the commercial operational framework that supports the technology.n
In January 2017, the People’s Bank of China successfully tested the digital ticket trading platform.n
According to a paper published by Tsinghua Financial Review, commercial exchanges between commercial banks such as Industrial and Commercial Bank of China, Bank of China, Bank Negara, Shanghai Pudong Development Bank and Hangzhou Bank use digital currency for the exchange of notes.n
In July, the Central Bank’s Digital Currency Institute officially started its operation as an independent business unit of the People’s Bank of China.n
Strategic significancen
From a strategic point of view, the CBDC’s issuance in China is in line with China’s Belt and Road initiative, which is an overall upgrade of international cooperation between China and the Eurasian Economic Union and China-Japan-Korea FTA.n
This enables China to use its geopolitical advantages and is an important platform for cooperation.n
Digital currency transactions lead to greater efficiency and convenience, eliminate the need for third-party involvement, and automate implementation with lower payment costs and error rates. This also increases the chances of other countries using the renminbi for payment in transactions, thereby increasing the liquidity of the Renminbi and bringing the Renminbi to the international community.n
From a risk management point of view, China’s CBDC may first be launched as a pilot project to manage risk and public expectations. China CBDC may first limit the intra-bank use of interbank transactions so that existing foreign exchange and capital controls can still be implemented without fundamental changes.n
This also avoids the concern that renminbi notes or coins will be repealed (as India did) resulting in financial instability. The general public and the business community also need more time to understand the technology and develop related applications.n
Business progressn
I also look forward to seeing the high-profile adoption of blockchain technology in retail and logistics companies.n
Startups like CDL have already launched their first commercial blockchain platform, while a Chinese state-owned firm is tracking and managing imported wine overseas. Customers can use their phone to scan the IoT Tags on the bottle and then get the information shared by manufacturers, logistics companies and distributors through the blockchain.n
We will also see global luxury brands, car and wine makers using blockchain and IoT technologies developed by Chinese companies to crack down on counterfeit and shoddy products to bring a whole new experience to their customers.n
As far as I know, a large Internet company in China is also setting up a blockchain laboratory. In 2018, they plan to introduce a blockchain platform that integrates their B2C, B2B, logistics and finance businesses to share data with their suppliers and business partners.n

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