Scams arise after China mentions national digital currency

Chinese cryptocurrency traders need to watch out for scams that are presented as the national digital currency of China. These tokens popped up shortly after an official of the China International Economic Exchange Center (CCIEE) made remarks about a Digital Currency or Electronic Payments system (DCEP). Scammers created 'DCEP tokens' and trade them on decentralized and P2P exchanges. Asia Crypto Today was the first to report on these new scams.

Vice chairman Huang Qifan of the CCIEE reiterated that the People's Bank of China will create a digital currency. They want to be the first in the world to roll out a Central Bank Digital Currency. His statement was the latest in a series of pro-blockchain remarks coming from highly placed government officials, including the president.

As soon as Qifan mentioned the codename DCEP, scammers started working on launching a token. Now there are multiple scams that look like the national digital currency of China. These DCEP tokens aren't available on regulated exchanges. Instead they can be found on decentralized exchanges and peer-to-peer platforms, because on those platforms people can trade without third party intervention.

How does China's digital currency work?

The People's Bank of China has been working on a Central Bank Digital Currency for five to six years now. The central bank of China will issue the digital wallet for this digital currency. In addition the currency won't be running on a decentralized blockchain like Bitcoin and Ethereum. Instead government-selected institutions will run the blockchain. The blockchain will have two tiers. One of them is connected to all the banks in the country. The second one connects the banks to the retailers.

Sina Finance News in China has already reported on the mobile application for the national digital currency. According to their report users will be able to transfer money between accounts by holding phones together. Instead of using QR codes like WeChat Pay and Alipay do, money can be transferred using NFC technology. That means that the digital money can be transferred without an internet connection. This would be a major benefit in rural areas.

China big on blockchain

On Thursday last week the Chinese president urged companies and government institutions to start using blockchain technology. President Xi Jinping sees blockchain technology as a core for innovation. According to him the implementation and adoption of blockchain technology is key in the transformation of industries and innovation of technology. He pointed to use-cases in financial business, mass transit and combating poverty.

One day later China approved a new law aimed at cryptography. As a result companies in the field of blockchain and cryptography will need to follow guidelines and regulations imposed by the state. In addition the new law needs to encourage research and development on commercial cryptography technologies in China. They believe that with this in mind a standardized regulatory system will help the blockchain market to grow.

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