Former Head of PBoC’s Digital Currency Institute Talks Web 3, Data in New Book
The founding head of the Digital Currency Institute (DCI) has co-authored a book that he says seeks to better clarify the definition, concept, logic, architecture and development ideas of Web 3.0.
Yao Qian, who is credited for founding the DCI as the arm of the People’s Bank of China (PBoC) that came up with the digital currency/electronic payment (DCEP) initiative, wrote the foreword of the book titled “Web 3.0: Changes and Challenges of the Next Generation Internet”.
The book talks about changes in approach to data
He presents it as a compilation of the results of researches by senior Chinese experts and scholars in fields related to Web 3.0. Aside from the structure, the book touches on the financial reform, business innovation, technical route, legal compliance, and policy response that Web 3.0 brings. It also references blockchain-based concepts such as the decentralized autonomous organization (DAO), DeFi (decentralized finance), NFT, GameFi, metaverse, the creator economy etc.
In the foreword, Qian states that Web 3.0 is going to usher in an era of a data revolution. He says the architecture would make data ownership and identity autonomy return from large platforms to users, and the Internet will be more equal and open.
Qian, who is now the Director General of the Science and Technology Regulatory Bureau of the China Securities Regulatory Commission, notes that the revolution will make the information on the Internet evolve into a trusted value. It will drive a distributed economy and distributed finance that is different from the traditional model.
A loose translation of his words says: “It (Web 3.0) is an organizational change. The traces of the enterprise may be “erased”. There is no board of directors, no management, no articles of incorporation … Algorithms alone can carry out various business activities, and the “unorganized organizational force” will become the intrinsic driver of the economic system. It is an experience change, and the Internet will become more intelligent, more humane, and more personalized.”
Data usage in DCEP
Known as the PBoC’s primary patent author on DCEP, Qian’s submission on data as central bank digital currencies come of age is significant.
He once debunked claims that the real-time monitoring of transactions was the motivation behind the DCEP’s digital yuan, Qian was identified in the past as one of the PBoC officials that indicated that data collected through DCEP would be used for law enforcement.
This is in addition to the data collected being anonymised as it is aimed to be used for improving the scrutiny and visibility of international capital flows. As the DCEP reduces the costs of printing and improves macroeconomic policymaking while maintaining cash circulation, Qian was said to describe it as having an ‘anonymous front end, real-name backend’.
When augmented by data mining and big-data analysis, the process provides the PBoC with the ability to have complete oversight over the use of the digital currency through DCEP’s “three centres” – Authentication Centre, Registration Centre, and Big Data Analytics Centre.
Meanwhile, despite plans to share DCEP data to fight crime, a report by the Bank of International Settlements (BIS) suggests that the benefits to law enforcement could be minimal. This is considering that ordinary criminals will tend to avoid a fully traceable currency. The DCEP’s data could be used to fight white-collar crime and corruption as there are much greater transparency in certain aspects of government spending.