0) By request, a thread on some of the details of DCEP’s technical architecture that have emerged in recent days.
1) Some background: We previously knew this would be a two-tier system. Tier 1 connecting PBOC to commercial banks and tier 2 commercial banks connecting to retail markets. We didn’t have much information on the technical implementation.
2) Unsurprisingly, it is now confirmed that many aspects of DCEP will be highly centralized. Three reasons are outlined for such centralization.
3) a) DCEP is a liability of the central bank.
b) Centralization is necessary for monetary control functions and other macro functions.
c) Centralization can prevent over-issuance.
b) Centralization is necessary for monetary control functions and other macro functions.
c) Centralization can prevent over-issuance.
4) It is noted that the processing capacity of distributed ledgers is not sufficient for a high volume of retail transactions and thus a central ledger is used.
5) The operating framework is composed of 6 items: currency, two libraries, three centers. Two libraries: “Commercial bank digital currency treasury” and a “digital currency issuing treasury.” Three centers: Certification center, registration center, and big data analysis center. 
6) - Certification Center – Centralized management of digital currency mechanism, user identify information, and components of security system. Authentication could use Public Key Infrastructure (PKI), identity- based cryptography (IBC), or similar technologies.
7) - Registration Center – Responsible for ownership and funds flow record and manages currency in circulation.
8) - Big Data Analysis center –
Processes massive amounts of transaction data, through analysis of transactions can prevent illegal acts like money laundering and provide support for implementation of macro policies.
Processes massive amounts of transaction data, through analysis of transactions can prevent illegal acts like money laundering and provide support for implementation of macro policies.
9) Interaction: Trusted Service Manager module for all involved parties, and a digital currency client application which is stored in the security module of the mobile device. Consumers and…
10) …merchants can conduct online transactions with other mobile devices through payment platforms, or offline transactions through NFC.
11) Core Technologies is divided into security, transaction, credibility. Security: The encryption and decryption technology are customized and designed by the National Password Management Agency in order to…
12) …establish a complete encryption and decryption algorithm system. It is mainly used in digital currency generation, anonymous transmission, and identity verification.
13) Data Security: Digital currency information is transmitted in ciphertext + MAC / ciphertext + HASH to ensure the confidentiality, security, and non-tampering of data and information.
14) Transaction: Of note, transaction security technology will have anti-duplicate transaction technology that ensures that digital currencies are not reused (double-spend problem) by adding digital signatures, serial numbers, time stamps, etc. to digital currency data strings.
15) Note: While there is information about anonymity, much of the structure, mechanisms, and extent remain unclear.
16) Top-level design of central bank digital currency to include six “links”: issuance, circulation, management, withdrawal, investment and financing, and interbank settlement.
17) Some noteable takeaways:
a) The digital currency management system includes a digital currency tracking system and a management system triggered based on certain conditions. The trigger conditions…
a) The digital currency management system includes a digital currency tracking system and a management system triggered based on certain conditions. The trigger conditions…
b) ...include economic status conditions, loan interest rate conditions, flow conditions, and point-in-time information conditions.
c) It is clear that this system will be able to provide granular point-in-time information that could be used in monetary policy.
d) The digital currency will be able to be used for inter-bank settlements, as expected.
d) The digital currency will be able to be used for inter-bank settlements, as expected.
e) Wallet technology is discussed: Individual and businesses will open digital wallets through commercial banks and businesses. As with paper money transfers between users will not require bank account binding, but transfers out of the digital wallet will require binding.
Finally, a disclaimer. The information above comes from a variety of sources such as PBOC directly but also from third party sources such as Huatai Securities. Research by Sino Global’s hard-working @dermotmcg and @Ian_88899.
为人民服务 @VitalikButerin :)
