PBOC Calls for Development of Smart Contract Ecosystem Using Digital Renminbi

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A senior fintech official from the Chinese central bank has called for the accelerated development of an “ecosystem” for smart contracts based upon use of the digital renminbi.

Mu Changchun (穆长春), head of the Digital Currency Research Institute at the People’s Bank of China (PBOC), said that digital renminbi smart contracts had broad applications and would be able to reduce the contract implementation costs of various economic activities.

“[Smart contracts] will optimise commercial environments and drive the in-depth development of the digital economy,” Mu said at the 2022 China International Financial Forum (2022中国国际金融年度论坛) held on 2 September in Beijing.

“Digital renminbi smart contracts have already been successfully applied to areas including government subsidies, retail sales and pre-paid funds management.

“Following the gradual improvement of the base-level platforms and related systems and arrangements, smart contracts will see accelerated implementation on an even greater scope.”

Mu highlighted the design features of the digital renminbi which make it highly suited to the effective deployment of smart contracts.

“The top-level design of the digital renminbi makes it possible to achieve programmability by means of smart contracts that do not impact monetary function.

“This enables the digital renminbi to automate payments and transactions in accordance with the conditions and rules stipulated by the parties to transactions.

“For this reason the digital renminbi has considerable advantages when it comes to the establishment of an ecosystem to support smart contract applications.”