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Digital Bytes is translated each week by our Chinese clients, some of whom then create their own Chinese- branded version to send to their clients across Asia via WeChat (as emails do not work in certain Asian
This week welcomed the Chinese New Year and it looks like the Year of the Tiger will be important for China, and indeed Digital Assets in China, as the Chinese launch their new Central Bank Digital Currency (CBDC) at the Beijing Winter Olympics.
Happy Chinese New Year
Source: Sun Signs
Although the new Chinese CBDC will not be run on a blockchain (as it controlled and run only by the Chinese government), the Chinese are embracing Blockchain technology with the announcement this week this week that a series of cities (including Beijing and Shanghai), government data-sharing and services, law enforcement, taxation, criminal trials, inspection, copyright, civil affairs, human society, trade finance, risk control management, equity market and cross-border finance, universities, banks, and manufacturing and utility firms are to be included in the 164 entities to carry out trials using Blockchain technology. This announcement follows on from the South China Morning Post which reported that China is planning to launch Blockchain-based Service Network (BSN) non-fungible tokens (NFTs).
The BSN is to be government-backed on a blockchain supported by the State Information Centre, Red Date, China Mobile and China UnionPay. NFTs are to be denominated in Chinese Yuan and so potentially giving another reason why China is to launch its CBDC. BSN will create two networks, one for inside China and one for international users and, as a way to differentiate itself from NFTs, BSN will issue a ‘Decentralised Digital Certificate’ (DDC) and not an NFT. The cost to create a DDC could be as low as $1 (which is highly competitive) since according to Being Crypto, NFTs can cost between $1 to $500. The BSN platform is expected to be officially launched in March 2022, so we will be keeping an eye on how successful it is.
Given the Chinese have historically been large collectors of all types of assets, will we see BSN dominate the DDC/NFT market or will we see a range of DDC version NFTs being created and sold exclusively for the Chinese citizens? Hence, instead of an NFT being a unique digital representation will there be two Digital- styled NFTs, one as an NFT sold and traded outside of China for the rest of the world, and the other NFT being created as a DDC for sale only in China?