Caixin: Yao Qian and Di Gang appointed as director and deputy director of the Central Bank Digital Currency Research Institute

Reporter: Zhang Yuzhe

Yao Qian, former deputy director of the Science and Technology Department of the People's Bank of China, will serve as director of the Digital Currency Research Institute, and Di Gang, former deputy director-general of the Science and Technology Department and director of information technology at the Silk Road Fund, will serve as deputy director. The appointment has been announced internally by the central bank.

The Digital Currency Research Institute under the central bank has begun to operate in a low-key manner. Caixin reporters learned from multiple channels that Yao Qian, former deputy director of the Science and Technology Department of the People's Bank of China, has been appointed as the director of the Digital Currency Research Institute, and Di Gang, former deputy director-general of the Science and Technology Department and director of information technology of the Silk Road Fund, has been appointed as the deputy director. The appointment has been announced internally by the central bank, and the two have officially taken up their posts recently. The Digital Currency Research Institute will be officially listed in the near future.

Yao Qian (left), Di Gang (right)

Fintech Committee Structure

On May 15, the People's Bank of China announced that it would set up a Financial Technology (FinTech) Committee to strengthen the research planning and overall coordination of FinTech work, strengthen the application practice of regulatory technology (RegTech), and enhance the ability to identify, prevent and resolve cross-industry and cross-market cross-cutting financial risks.

According to Caixin reporters, the Digital Currency Research Institute is also a member of the Financial Technology Committee. Other members of the Financial Technology Committee include science and technology, monetary policy, financial markets, financial stability, payment and settlement, credit reporting and other related departments. The Digital Currency Research Institute is a public institution. In the industry's view, research in the frontier field of financial technology requires a lot of manpower, financial resources, and material resources. Whether the incentive mechanism of the Digital Currency Research Institute can retain top talents in the future may be the biggest challenge.

According to Caixin reporters, the Digital Currency Research Institute of the People's Bank of China was renamed based on the former Printing Science Institute. It has six or seven departments set up inside, and its research directions include digital currency, financial technology, etc.

In November 2016, the central bank issued a recruitment notice, in which the six positions recruited by the Printing Science Research Institute were to reserve technical talents for the central bank's digital currency research institute. Among these six positions, five of them are mainly engaged in the architecture design and development of the software and hardware systems of digital currency and related underlying platforms, and those with experience in system architecture design, blockchain technology development or application experience, and big data platform development experience are preferred; one position is mainly responsible for the research of key cryptographic technologies used in digital currency, symmetric and asymmetric cryptographic algorithms, authentication and encryption, etc.

In the past two years, the monetary authorities of major economies in the world have gradually stepped up their research in the field of digital currency, trying to use digital currency to improve the business model of traditional financial and monetary systems. Central banks in the United Kingdom, the United States, Canada, Sweden, Singapore, Japan and other countries have expressed their willingness to explore and study the institutional design and key technologies of legal digital currency. In-depth research and promotion of the development and application of digital currency have become a universal consensus around the world.

Diversification of digital currency research capabilities

On May 25, the Payment and Clearing Association of China, a subsidiary of the central bank, also established a professional committee on financial technology (hereinafter referred to as the committee). The central bank's financial technology committee aims to strengthen the research planning and overall coordination of financial technology work. Under its guidance, the committee will strive to become an important participant, service provider and promoter of financial technology development.

It is worth noting that the special committee also established a digital currency research group and invited Di Gang, deputy director of the Digital Currency Research Institute, to serve as the group leader. Di Gang stated at the aforementioned professional committee member conference and financial technology development seminar that it is completely strategic, necessary, forward-looking, urgent and feasible to establish a digital currency-related business system and technical system as soon as possible through strengthening research. It is hoped that through the work of the digital currency research group, the collaborative efforts of digital currency will be continuously strengthened, and efforts will be made to promote cooperation in the fields of government, industry, academia, research and application, so as to form a diversified supplement to the central bank's digital currency research force and jointly promote the formation of a multi-level, multi-angle and all-round digital currency research system. "Actively try new, safe and effective new technologies and methods, and practice prudently with a scientific, rigorous, open and inclusive attitude to make China's legal digital currency a reality as soon as possible."

In March this year, Chen Yulu, deputy governor of the People's Bank of China, said in public that financial technology has become an important development trend in the financial industry. Among them, the development of blockchain technology and the issuance, use and international supervision of digital currency are the focus and frontier areas of current research. "The blockchain-based digital bill trading platform promoted by the People's Bank of China is at the forefront of the practical application of blockchain technology in the world. The next step is to conduct in-depth research on the impact of blockchain technology and other financial technologies on personal asset security, privacy protection, global financial stability and the global financial governance architecture."

Central bank leads in digital currency exploration

Earlier this year, the central bank successfully tested the prototype system of the blockchain-based digital bill trading platform, and took the lead in exploring the practical application of blockchain in currency issuance.

As early as 2014, the People's Bank of China established a research team to conduct in-depth research on digital currency and demonstrate the feasibility of the central bank issuing legal digital currency. On January 20, 2016, the People's Bank of China Digital Currency Seminar was held in Beijing. The meeting clarified the strategic goal of the central bank to issue digital currency. It was also the first public statement by a global central bank on legal digital currency, which attracted much attention in the industry and achieved phased results in the publication of a special issue of China Finance magazine.

In 2015, the central bank conducted further in-depth research on the issuance and business operation framework of digital currency, key technologies of digital currency, the circulation environment of digital currency, legal issues faced by digital currency, the impact of digital currency on the economic and financial system, the relationship between legal digital currency and privately issued digital currency, and the issuance experience of digital currency internationally, and formed a series of research reports on the issuance of digital currency by the People's Bank of China. Some of these research results have been submitted to the State Intellectual Property Office for patent applications, and some have been published in the form of special topics.

In July 2016, the central bank launched the research and development of a prototype of a digital bill trading platform based on blockchain and digital currency, and decided to use the digital bill trading platform as a pilot application scenario for legal digital currency, and to verify blockchain technology with the help of the digital bill trading platform. In September 2016, the bill trading platform preparatory group, together with the digital currency research institute preparatory group, took the lead in establishing the digital bill trading platform preparatory group and launched the closed development of the digital bill trading platform.

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