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Bank Of China Says Digital Yuan Will Not Cause Inflation

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Bank Of China Says Digital Yuan Will Not Cause Inflation
Central Bank of China claims that digital Yuan will not cause inflation.

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2:27
Bank Of China Says Digital Yuan Will Not Cause InflationNEWS
The Bank of China’s secretive digital currency tests have led to tremendous curiosity among Chinese citizens. Recently, the bank responded with an official explanation of the proposed digital Yuan and how it would work. 

A bank representative confirmed on the China Central Television on April 19 that the new digital currency (also referred to as DC/EP, for “digital currency/electronic payment”) pilot test has been carried out in the cities of Shenzhen, Suzhou, Xiongan new area, Chengdu, and the future site of the winter Olympics. 

However the researcher stressed that these current tests do not imply that the digital Yuan has been officially issued for public use. The representative added: 

“The current closed test of digital Yuan will not affect the commercial operation of listed institutions, nor will it affect the RMB issuance and circulation system, financial market and social economy outside the test environment.”

In order to ensure that the central bank's digital currency is not oversold, commercial institutions will pay a 100% reserve to the central bank, says the institution. In other words, at the time of issuance, the People's Bank of China will first exchange the digital currency to banks or other operating agencies. These agencies will then release the digital currency into public circulation.

Technical design and main characteristics 
The bank has completed the top layer of design, with the digital currency adopting a two-layer architecture and two-tier delivery system.

If the payment functions of online banking and payment platforms were to go down due to poor network signals, DC/EP’s dual offline technology will ensure that the digital Yuan will work as effectively as the paper Yuan. The bank explained: 

“In the absence of a network, as long as two mobile phones equipped with a DC / EP digital wallet are touched, the transfer or payment function can be realized.”

According to the bank, The Chinese version of digital currency is not tied to any bank account. They further claim that it is free from the control of the traditional banking system. 

Unlike other cryptocurrencies, the digital Yuan is launched by China's central bank and is therefore backed by the country's credit. This is similar to an electronic version of the renminbi. The bank says that, compared with Bitcoin, this new digital currency will have greater inherent stability.

As Cointelegraph reported earlier, the Chinese central bank’s digital currency was tested as part of a transport subsidies scheme for local government and enterprise workers.

#Blockchain
#Cryptocurrencies
#China
#Yuan
#CBDC
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Turner Wright
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41 MINUTES AGO
XRP Army Shrinks as Liquidations Passed $263M in 2019
From dwindling numbers of Twitter users in Q1 to large-scale liquidations in 2019, reduced engagement has affected the price of XRP.

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2:17
XRP Army Shrinks as Liquidations Passed $263M in 2019NEWS
According to a quarterly report, online engagement towards XRP on Twitter fell in Q1 2020, while Ripple was forced to liquidate many of its holdings to stay cash flow positive.

The report, by social trading and investing platform eToro in

 partnership with analytics and finance management startup The Tie, indicates that the number of Twitter users discussing XRP fell by 16% in the first quarter of 2020. Meanwhile, the number of users in the “XRP Army” — supporters of the cryptocurrency — has declined 82% since January 2018.

XRP losing support and value?
This is not the first trouble XRP has had with online engagement. A Twitter user compiled a list of Telegram groups on April 15 which showed over 63% of @Ripple members had left since June 2018.

Though the connection between online activity and price across all cryptocurrencies isn’t definitive, The Tie’s research does show a correlation between XRP price and the number of Twitter users across Q1 2020. 

XRP

Source: The Tie

The token — $0.19 at the time of press — is worth a fraction of its $2.28 peak at the end of 2017.

Over $263M XRP liquidated 
In the first quarter of 2020, XRP was overtaken in daily volume by up-and-coming token Chainlink (LINK), and came close to losing its No. 3 spot in the Top 10 to Tether (USDT) during the flash crash in mid-March.

Even before the crypto bloodbath — which hit nearly every token hard — XRP was considered the worst performing large cap token. The Tie report noted that the firm “relied on XRP liquidations to stay cash-flow positive” in 2019:

“While Ripple liquidated only $13M worth of its XRP holdings in Q4 2019 (the least in three years), it sold over $250M worth in Q3 of last year. It is not yet known how much XRP Ripple sold in Q1 2020.”

These liquidations may be related to a class-action lawsuit the company is currently facing in New York. CEO Brad Garlinghouse is personally accused of pushing the token to prospective investors while quietly cashing out his holdings.

#Cryptocurrencies
#Ripple
#Finance
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