What is the difference between the digital currency issued by the central bank and Bitcoin?

On the 21st, the central bank proposed at the 2019 National Currency Management Work Conference: In 2019, my country will vigorously promote the research and development of the central bank's digital currency. This news made many people imagine that the digital currency developed by the central bank is based on the current RMB converted into a digital system. In layman's terms, it is the digitization of cash, which is very different from the current blockchain and virtual currencies such as Bitcoin.

Currently, there are disputes among countries over digital currencies, but no one can turn a blind eye to it. The country’s move to launch digital currencies is gaining momentum. What is the difference compared to digital currencies such as BTC?

Recently, the Royal Mint of the United Kingdom launched its own digital currency, which is called Royal Mint Gold (RMG); Dubai officially launched a cryptocurrency called "emCash" in October last year. This cryptocurrency will be used to pay for government and non-government services and may be promoted to the entire UAE in the future; Venezuelan President Maduro announced in December last year that he would issue the Petro. Now there is news that the Petro will start pre-sale on February 20, with a reference price of US$60, and its value will change with fluctuations in the oil market.

In addition to these countries, China has also caught up with the trend and may become the first country in the world to launch a central bank-issued cryptocurrency in 2018. This news was confirmed by Zhang Yifeng, director of the China Banknote Blockchain Research Institute: "The digital currency developed by the central bank of my country and the digital bill trading platform based on blockchain have also been successfully tested, which means that the central bank of China will become the first central bank to issue digital currency in the world."

Since digital currencies, such as Bitcoin, are already extremely popular and have been circulated by many people, why does the country still bother to launch official cryptocurrencies? This is because the nature of the two is completely different.

Although both currencies use blockchain technology, a closer look shows that Bitcoin, Ethereum and other decentralized digital currencies have public ledgers, but anonymous accounts. That is, no one knows who owns the account. On the other hand, state-issued digital currencies are centralized, and accounts must be real-name, transactions are traceable, and are semi-private ledgers that only government agencies have the right to access.

In addition, a particularly important difference is that the total amount of decentralized digital currency is constant and is determined by the blockchain mechanism and the consensus of participants. The supply of national digital currency is issued 1:1 with legal currency and is determined by the government.

After sorting out the internal differences between the two, it is not difficult to understand the logic behind governments launching their own digital currencies.