Design of a digital currency information system based on the UnionPay network

doi:10.1007/s42524-020-0134-0

Front. Eng

2020, Vol. 7

Issue (4) : 471-484 https://doi.org/10.1007/s42524-020-0134-0

RESEARCH ARTICLE

Design of a digital currency information system based on the UnionPay network

Hongfeng CHAI¹, Quan SUN¹(

), Yu ZHOU², Tao ZHU²

¹. Fudan University, Shanghai 200433, China; China UnionPay Co., Ltd., Shanghai 201201, China
². China UnionPay Co., Ltd., Shanghai 201201, China

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Abstract

Digital currency can reduce the issuance and circulation costs of physical cash and improve the convenience and transparency of economic activities. Therefore, digital currency has received widespread attention from central banks in recent years. As an important financial infrastructure, the UnionPay network is expected to provide effective support for the construction and operation of a digital currency system. This study uses the UnionPay network as basis to systematically propose a digital currency information system from three aspects, namely, digital currency account opening, exchange, and use, and further expounds on the operation mechanism of a digital currency information system prototype. This study also discusses how to apply blockchain technology to digital currency, such as using distributed ledger for digital currency confirmation and registration and using blockchain-enabled smart contracts to realize the forward guidance function of the central bank digital currency. Lastly, the current research introduces the value of using the UnionPay network to support the operation of a digital currency information system and its technical challenges, aiming to provide beneficial guidance and reference for future research effort.

Keywords UnionPay network digital currency information system blockchain smart contracts

Corresponding Author(s): Quan SUN

Just Accepted Date: 08 September 2020 Online First Date: 29 September 2020 Issue Date: 02 November 2020

Cite this article:

Hongfeng CHAI,Quan SUN,Yu ZHOU, et al. Design of a digital currency information system based on the UnionPay network[J]. Front. Eng, 2020, 7(4): 471-484.

URL:

https://academic.hep.com.cn/fem/EN/10.1007/s42524-020-0134-0
https://academic.hep.com.cn/fem/EN/Y2020/V7/I4/471

	Bitcoin	Ethereum	RSCoin	Jasper (CAD-Coin)	Ubin	DCEP
Start time	2008	2014	2016	2016	2017	2017
Supervision organization	/	/	Bank of England	Bank of Canada	Monetary Authority of Singapore	People’s Bank of China
Participating organization	Technology geek	Technology geek	University College London	Bank of Montreal, Canadian Imperial Bank of Commerce, Royal Bank Of Canada, National Bank of Canada, and Hong Kong and Shanghai Banking Corporation (HSBC), among others	Bank of America Merrill Lynch, Development Bank of Singapore, HSBC, JPMorgan Chase, United Overseas Bank, Citibank, and Standard Chartered Bank, among others	Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank, among others
Technical support	Open source blockchain	Open source blockchain	Two-tiered system, optimized based on Bitcoin	R3 Corda	R3 Corda, Quorum, and Hyperledger Fabric	Two-tiered system, no blockchain
Application scenarios	P2P (Peer to Peer) transfer	P2P transfer, smart contract, and Defi	Research on blockchain to support retail payments	Experimented to apply DLT in wholesale settlements, such as inter-bank settlements, delivery versus payment, and cross-border settlements	Experimented to apply DLT in wholesale settlements, such as inter-bank settlements, delivery versus payment, and cross-border settlements	Replace physical cash for retail payments
Characteristics	Decentralization, anonymity, no national boundary, and anti-regulation	Decentralization, anonymity, no national boundary, anti-regulation, and programmable	Two-tiered system, auditability, and high performance	Payment systems based on DLT technology can save costs and improve efficiency	7×24 real-time service, liquidity saving mechanism, and reduced operational risks of the trading system	Secure, stable, controllable anonymity, convenient, and efficient
Current situation	Stable operation	Stable operation	Prototype	Experiment	Experiment	Pilot in some cities

Tab.1 Detailed information of diverse digital currencies

Fig.1 Digital currency account opening process.

Fig.2 Example of the UnionPay digital currency wallet managing digital currency accounts of various banks.

Fig.3 Digital currency exchange process through the UnionPay digital currency wallet.

Fig.4 Fig. 4 NFC transaction process.

Fig.5 Use of digital currency through the UnionPay digital currency wallet.

Fig.6 QR code transaction process.

Fig.7 Remote networking transaction process.

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