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Author: Admin | 2025-04-28
Bitcoin sparked new discussions on using blockchain technology to overhaul the existing fiat currency system. In 2014, J.P. Koning proposed the concept of “Fedcoin” on his blog, envisioning the issuance of US dollars using Bitcoin technology.Footnote 12 The formal proposition of CBDCs originated from Ben Broadbent, the Deputy Governor of the Bank of England, in 2016. Broadbent advocated that central banks could leverage Bitcoin’s underlying technology to issue digital forms of fiat currencies. Furthermore, he argued for an expanded understanding of digital currencies, stating that they should encompass not only privately issued digital currencies like Bitcoin but also digital fiat currencies issued by central banks.Although CBDCs employ asymmetric encryption technology like Bitcoin, they are typically not classified as cryptocurrencies because their issuance is backed by central banks. With these concepts gradually entrenched in the financial landscape, the international community has standardized terminology over time for digital currencies, distinguishing between central bank digital currencies and private digital currencies. The latter, often called “virtual currencies”, are further divided into encrypted and non-encrypted types, based on their technological features.A detailed explanation of the classification of digital currencies will be provided in the next chapter.2.4 Technological Forms and Financial Characteristics of Digital CurrenciesRegularly used online banking and third-party payment methods, such as Alipay, WeChat Pay and PayPal, possess a significant degree of electronic or digital functionality; however, these should not be confused with “digital currencies.” Digital currency signifies a new breed of currency and payment method, which is originally digital and designed to function as peer-to-peer digital cash that facilitates direct payments, clearing and settlements, potentially bypassing financial intermediaries and thereby transforming the foundation of the existing financial system.It should be noted that the terms “electronic currencies” or “electronic payments” are often used but do not equate to digital currencies. The concept of digital
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