Chinese media analysts believe that there are some important similarities between the Digital Dollar Project and the exchange People’s Bank of China (PBoC) ‘s digital yuan – but they say that by the time the U.S. project smooths wrinkles, it might be too late to beat Beijing.
In an article published by media outlet 52CBDC, analysts suggested that, like the PBoC, the White Dollar Project proposed white paper to use a “double layer” system for its central bank digital currency (CBDC).
Although the PBoC has played its cards very close to its chest on the technological details of the digital yuan, many Chinese reporters agree that it will use a two-layer architecture and a two-layer delivery system.
The White Dollar White Paper also mentions the use of a two-level structure, distributing the token through commercial banks – a system no different from China’s, although the PBoC is expected to initially be exclusive use want to make state banks.
As such, although the Federal Reserve and the PBoC would be the only issuer, other banks would act as intermediaries in both countries.
The authors of the report add that the Digital Dollar Project also suggests using a similar (including two-tier) operating system for exchanges and deposits. Again, both US and Chinese projects placed their central banks on top of the pyramid, with regulated financial intermediaries processing digital currency transactions in parallel to conventional cash transactions.
However, the report adds that a number of issues are not addressed in the U.S. White Paper, including privacy issues – which could conflict with the U.S. Fourth change.
The authors report that the PBoC has already made it clear that digital yuan deals will generate no interest and will not affect the bank’s existing business. Matters related to the digital dollar have not yet been addressed, according to the authors.
In addition, the U.S. project has not yet clearly specified whether the Digital Dollar would support offline payments, or whether it would develop a unique wallet or use a third-party solution.
The authors end with a barb, which states:
Perhaps all of these things will be clarified in the next iteration of the white paper. But by then, the digital yuan may be ready to launch. ‘