A week's observation: the trend of digital currencies, Chinese and foreign central banks grab the lead

Summary

Event: Media reports that the French central bank is expected to test digital currencies in the first quarter of 2020, and the Ethereum Istanbul upgrade is completed.

China's central bank DCEP continues to accelerate, and the French central bank is expected to test digital currencies in 2020. On December 9, an article in Caijing magazine stated that the Central Bank of China's digital currency (DCEP) is being piloted in Shenzhen, Shenzhen, and is already on "the eve of its birth." Speeding up. According to foreign media reports, the French central bank will test its digital currency in the first quarter of 2020, known as "Central Bank Digital Currencies" (CBDC).

The French central bank governor, Francois Villeroy de Galha, announced the news at a meeting hosted by the French Prudential Supervision and Resolution Authority (ACPR) and called for cooperation. ACPR is an agency similar to Brazil's CVM and is responsible for monitoring French financial activities. Villeroy said that the French central bank will begin testing CBDC in the first quarter of 2020 as part of its digital euro project. The decision comes as governments increasingly worry about companies such as Facebook planning to issue new currencies. At present, only a few countries in the world, such as China and France, have announced central bank digital currency plans. It is expected that more national central banks will join the digital currency club in the future.

The Ethereum Istanbul upgrade reached the designated block height at about 8:29 on December 8. The network was stable and the Ethereum Istanbul upgrade was completed. According to Cointelegraph reported on December 8, Ethereum co-founder Vitalik Buterin has stated that after the Istanbul fork, Ethereum will be able to process 3,000 transactions per second. On the morning of December 8th, the Ethereum Istanbul hard fork upgrade was successfully completed and brought 6 improvement proposals. The Istanbul upgrade is the first upgrade in the quiet phase and the second is the Berlin upgrade expected to be implemented in January 2020. These two upgrades will eventually bring Ethereum to the 2.0 phase because of the shift in consensus protocols involved. Ethereum 2.0 will enable the Ethereum network to achieve a higher degree of scalability and decentralization. The most important change is to complete the conversion of the consensus mechanism from PoW to PoS. The mainstream public chains, including EOS and Tron, use a consensus mechanism similar to PoS, so they enjoy faster underlying performance, and their ecological development is rapid and active. Ethereum 2.0 will hit 3000tps to catch up with competitors.

At the national and central bank level, digital currencies have become a new battlefield for the game of big powers; and in the public chain ecosystem, if the rapid promotion of application landing becomes the direction of efforts of various platforms. Industry applications and regulations will continue to drive industry progress.

Last week's market review: Chainext CSI 100 rose 1.12%, and payment transactions performed the best in the segment. From the perspective of segmentation, payment transactions and pure currencies performed better than the average levels of Chainext CSI 100, respectively + 2.47% and 1.97%. The performance of the basic chain was equal to the average level of Chainext CSI 100, + 1.22%. The Internet of Things & Traceability, Entertainment Social, commercial finance, basic enhancement, storage & computing, and AI performance were inferior to the Chainext CSI 100 average level, respectively -1.68%, -2.14%, -2.88%, -1.94%, -3.99%, -1.67%.

Risk Warning : Uncertainty of regulatory policies, project technology progress and application landing is less than expected, and cryptocurrency-related risk events occur.

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1. Hot spot tracking: China and France's central bank competes for digital currency, Ethereum sprints 3,000 TPS

Event: The digital currency of the People's Bank of China is being piloted in Shenzhen, and it is "on the eve of birth". The French central bank is expected to test digital currencies in the first quarter of 2020, and the Ethereum Istanbul upgrade is complete.

China's central bank digital currency DCEP continues to accelerate. On December 9, an article in Caijing magazine stated that the Chinese central bank's digital currency (DCEP) is being piloted in Shenzhen, Shenzhen, and is already on "the eve of its birth", and is about to enter the life application scene. It is reported that 1) DCEP is led by the Central Bank ’s Currency, Gold and Silver Bureau, and the Central Bank ’s Digital Currency Research Institute has implemented it. The Digital Currency and Anti-Counterfeiting Management Office under the Currency Gold and Silver Bureau is the only official office related to DCEP. 2) DC / EP is being piloted in Shenzhen. The pilot plan is divided into two phases: a small-scale scene closed pilot at the end of this year, and a large-scale promotion in Shenzhen next year. 3) The pilot institutions include the four major state-owned commercial banks of Industry, Agriculture, China, and Construction, and the three major operators of Mobile, Telecom, and China Unicom. 4) The pilot scenarios include transportation, education, medical treatment, and consumption. They will reach C-end users. Pilot banks can choose pilot scenarios based on their own advantages. 5) Testing of DC / EP related standards and payment system access are progressing simultaneously. 6) DC / EP is also expected to land in Suzhou. Recently, the Yangtze River Delta Financial Technology Co., Ltd., a subsidiary of the central bank, is urgently recruiting blockchain-related talents. 7) All four major banks have set up DCEP closed development project teams in Beijing. We have previously summarized in the report that 1) DCEP is positioned as digital cash (M0) and is a central bank liability; 2) a two-tier operating system of "central bank-commercial bank" is adopted, and distribution agencies need to pay 100% reserve to the central bank; 3 ) Controllable anonymity; 4) Does not pay interest to holders. We believe that DC / EP may provide development space for market institutions in multiple links such as distribution and circulation (see the report for details). From the recent actions of relevant departments, digital currencies are accelerating.

Media reports that the French central bank is expected to test digital currencies in 2020, and the Chinese and French central banks are leading the digital currency era. According to foreign media reports, the French central bank will test its digital currency in the first quarter of 2020, known as "Central Bank Digital Currencies" (CBDC). The French central bank governor, Francois Villeroy de Galha, announced the news at a meeting hosted by the French Prudential Supervision and Resolution Authority (ACPR) and called for cooperation. ACPR is an agency similar to Brazil's CVM and is responsible for monitoring French financial activities. Villeroy said that the French central bank will begin testing CBDC in the first quarter of 2020 as part of its digital euro project. The decision comes as governments increasingly worry about companies such as Facebook planning to issue new currencies. According to reports, unlike most other countries, currently only French financial institutions can use this proposed digital currency, which cannot be used for retail and personal payments. Villeroy said that using CBDC for retail payments could pose security risks. At present, only a few countries in the world, such as China and France, have announced central bank digital currency plans. It is expected that more national central banks will join the digital currency club in the future.

The Ethereum Istanbul upgrade reached the designated block height at about 8:29 on December 8. The network was stable and the Ethereum Istanbul upgrade was completed. According to Cointelegraph reported on December 8, Ethereum co-founder Vitalik Buterin has stated that after the Istanbul fork, Ethereum will be able to process 3,000 transactions per second. On the morning of December 8th, the Ethereum Istanbul hard fork upgrade was successfully completed and brought 6 improvement proposals: 1) EIP-152: adding Blake2 pre-programmed functions; 2) EIP-1108: reducing alt_bn128 pre-compiled Gas cost; 3) EIP-1344: Add ChainID opcode; 4) EIP-1884: redefine trie-size-based opcode; 5) EIP-2028: reduce Calldata Gas cost; 6) EIP-2200: consider the change of SLOAD Gas cost Redefine the net value of the SSTORE Gas fee. According to the planning of its founding team, the development path of Ethereum is divided into four stages, namely: Frontier, Homestead, Metropolis and Serenity. Each stage will be upgraded through a hard fork, and each stage of the upgrade is to introduce more features and fix problems. The Istanbul upgrade is the first upgrade in the quiet phase and the second is the Berlin upgrade expected to be implemented in January 2020. These two upgrades will eventually bring Ethereum to the 2.0 phase because of the shift in consensus protocols involved. Ethereum 2.0 will enable the Ethereum network to achieve a higher degree of scalability and decentralization. The most important change is to complete the conversion of the consensus mechanism from PoW to PoS. The mainstream public chains, including EOS and Tron, use a consensus mechanism similar to PoS, so they enjoy faster underlying performance, and their ecological development is rapid and active. Ethereum 2.0 will hit 3000tps to catch up with competitors.

At the national and central bank level, digital currencies have become a new battlefield for the game of big powers; and in the public chain ecosystem, if the rapid promotion of application landing becomes the direction of efforts of various platforms. Industry applications and regulations will continue to drive industry progress.

2. News from governments of various countries: China launches application projects such as smart taxation and fintech innovation supervision

Central Bank of Sri Lanka: A blockchain-based "Know Your Customer" (KYC) platform for customer authentication will be developed. It will work with technology and financial industry experts to jointly create a proof of concept and share this KYC system in the banking industry. The system will allow the Sri Lankan government and commercial banks to update and share customer information on a blockchain.

State Administration of Taxation of China: Promote the implementation of smart taxation. Encourage and support the tax authorities in the Yangtze River Delta region to explore the use of 5G, blockchain, artificial intelligence and other technologies to further optimize tax law enforcement methods and provide intelligent and personalized online and offline tax services. Promote the construction of an intelligent tax service hall, and realize intelligent tax services such as intelligent guidance, intelligent order filling, and intelligent review. Develop a list of "No penalty for first violation" in the Yangtze River Delta region.

UAE Central Bank: The Central Bank does not approve any privately issued cryptocurrencies or plans and has not issued any relevant licenses in the UAE. Private cryptocurrencies carry potential risks related to price volatility, money laundering and terrorist financing.

Brazil's Internal Revenue Service: Focuses on crypto transactions and transfers, and has established special fine rules to fine those who fail to submit monthly reports on crypto asset movements. Beginning August 1, transactions involving cryptocurrencies such as Bitcoin must be reported to the IRS in accordance with the rules established by the 1888 normative directives issued in May 2019.

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3. Industry chain-related developments: BTC miners' earnings rose 11.7% MoM

(The following source website data is updated to December 7.)

Last week, BTC added 2.18 million transactions, an increase of 4.4% from the previous month; ETH added 4.25 million transactions, a 7.5% decrease from the previous month.

Last week, the average daily income of BTC miners was $ 14.03 million, an increase of 11.7% from the previous month; the average daily income of ETH miners was $ 1.81 million, a decrease of 3.6% from the previous month.

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Last week, the average daily computing power of BTC reached 96.8 EH / s, an increase of 11.5% from the previous month; the daily average computing power of ETH across the network reached 174.6 TH / s, a decrease of 0.8% from the previous month.

Last week's BTC network-wide mining difficulty was 12.88T, a drop of 0.2% month-on-month; the next difficulty adjustment day will be on December 19, and the expected difficulty value is 12.84T (-0.27%); last week, the average ETH network-wide mining difficulty was 2.54T, an increase of 1.2% from the previous month.

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4. Last week's market review: Chainext CSI 100 rose 1.12%, and payment transactions performed the best in the segment

We introduced the professional index product of the token market——Chainext CSI series index, where the CSI 100 index [1] represents the overall market trend; the CSI 5 index [2] represents the market's large-cap currency trend; the CSI 21-100 index [3] On behalf of the market in the small cap. The market continued to adjust this week. As of last Sunday (December 8), the Chainext CSI 100 index was 669.6, an increase of 1.12% from last week, and the total 24-hour trading volume on Sunday was US $ 31.8 billion; of which, the global average price of BTC was US $ 756.45, an increase from the previous month 1.89%; the average global price of ETH was US $ 151.26, an increase of 0.05% from the previous quarter.

[1] The Chainext CSI 100 index consists of the 100 largest and most liquid tokens in the token market, which comprehensively reflects the overall price trend of the market;

[2] The Chainext CSI 5 index is composed of the 5 largest and most liquid tokens in the token market (BTC, ETH, XRP, BCH, EOS), reflecting the price trend of the market's oversized currency;

[3] The Chainext CSI 21-100 index is composed of the CSI 100 index sample and the CSI 20 index sample, which reflects the price trend of the market's small cap currency.

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From the perspective of segmentation, payment transactions and pure currencies performed better than the average levels of Chainext CSI 100, respectively + 2.47% and 1.97%. The performance of the basic chain was equal to the average level of Chainext CSI 100, + 1.22%. The Internet of Things & Traceability, Entertainment Social, commercial finance, basic enhancement, storage & computing, and AI performance were inferior to the Chainext CSI 100 average level, respectively -1.68%, -2.14%, -2.88%, -1.94%, -3.99%, -1.67%.

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risk warning

1. Uncertainty of regulatory policies; 2. The technical progress and application of the project fell short of expectations; 3. Risk events related to cryptocurrencies occurred.