Ethereum blockchain opened a new front in blockchain technology by introducing smart contracts technology. Currently, it has the most use cases around the world compared to any other blockchains. It supports most of the DeFi protocols, and non-fungible tokens (NFTs), which have taken the world by storm.
And just to add to its list of use cases, Yao Qian, the former head of China’s Digital Yuan project at People’s Bank of China (PBoC) said that the central bank digital currencies that have become the talk of the town by most central banks around the world including in countries like USA and England could be forced to operate on the Ethereum blockchain.
According to Yao Qian, the CBDCs will eventually become ‘smart’ and cease to be just digital versions of the fiat currencies.
According to a report by Sina Finance, Yao Qian who is currently the director at the Science and Technology Supervision Bureau of the China Securities Regulatory Commission pointed out that CBDCs should seek to be more than just digital versions of fiat currencies but rather seek to incorporate smart contract functionality.
“We can imagine that if digital dollars and digital yen run directly on blockchain networks such as Ethereum and Diem, then central banks can use their BaaS services to directly provide users with central bank digital currencies without the need for intermediaries. Layered operations can enable the central bank’s digital currency to better benefit groups without bank accounts and achieve financial inclusion,” Yao Qian said during the International Finance Forum (IFF) 2021 Spring Conference that was held in Beijing from May 29th to May 30th.
In addition to Yao’s campaign for CBDCs to adopt smart contract functionality, he also pointed out the security concerns arising from the smart contract vulnerabilities and said that the technology needs to be developed further in future. The other concern he raised was the issue of the legal debate about digital contracts in some parts of the world.