SenseTime, an artificial intelligence SaaS company, has announced partnering with the Digital Currency Research Institute to help the central bank handle its digital currency (CBDC).
The move is part of the government’s efforts to support blockchain projects. Thus, it decided to tap this partnership to go ahead with the development of its digital yuan.
Deal aims to accelerate AI advancement
The partnership aims to enhance risk management and operating capabilities through financial institutions.
SenseTime, the world’s highest-valued AI company, is supported by multinational e-commerce firm Alibaba which led the company’s $600 million funding in 2018.
“The two parties will jointly establish a research and innovation body, take application scenarios, jointly develop AI applications in finance, and accelerate the advancement of AI innovation research in the financial field.”
China accelerates blockchain adoption
The deal comes amid the government’s efforts to accelerate blockchain adoption and CBDC initiatives.
The digital yuan is being tested in four Chinese cities; Shenzhen, Xiongan, Chengdu, and Suzhou.
It is worth mentioning that Starbucks and McDonald’s are backing payments in digital yuan in Xiong’an.
The digital yuan will likely be launched in May 2020.
CBDC to help governments control crypto
Despite governments’ interest in decentralized ledger technology (DLT), the traditional financial system still does not trust cryptocurrencies.
During his speech before the UK Parliament on 4 March, Andrew Bailey, the upcoming governor of the Bank of England, said:
“If you want to buy Bitcoin, be prepared to lose all your money… [Bitcoin] has no intrinsic value.”
Nevertheless, the great efforts that appear to be appropriate for technology such as the launch of the “Venezuelan Petro” and central bank digital currency (CBDC) talks show that the technology is still either deeply misunderstood or considered a threat to the status quo.
Although various types of structures were discovered for CBDC, there is always a certain level of centralization that conflicts with the basic values of Bitcoin and cryptocurrencies: decentralization and volatility.