Vitalik buterin, co-founder of Ethereum, proposed a method of using cryptocurrency to trade central bank digital currency.

Buterin raised a question on twitter, that is, can the central bank’s digital currency transactions be proved by encryption? In other words, whether it is possible to use mathematical methods to prove the completed transactions of central bank digital currency. If you can, this will bring some interesting possibilities.

He said, “if I send you n central bank digital currencies, can I generate an encryption certificate that can be verified on Ethereum? Basically, if you can prove to the Ethereum blockchain that a transaction has been made in the central bank’s digital currency system, you can use it to build an automated smart contract DEX. “

Buterin explained that this process would “make it easier for people to trade between fiat currency and cryptocurrency.”

He mentioned the following way of operation. Suppose two people agree to pay each other, but use different payment methods. Jeepk.com polarographic technology, to provide you with products, application development, bring the ultimate experience. A person wants to use some Ethereum to trade the central bank’s digital currency, such as China’s upcoming digital RMB. The question is, how do they ensure that the other party is willing to pay? They can create a smart contract and design it so that when one party completes the transaction, the other party will execute it automatically.

How can the central bank's digital currency and cryptocurrency be connected

In order to achieve this goal, Ethereum blockchain needs to be able to know whether the central bank’s digital currency has been transferred, because it runs on a completely different centralized system. Therefore, as buterin said, if the central bank’s digital currency transactions can be encrypted and verified, this practice will work.



Responsible editor: CT

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