Babbitt column | How will the digital currency "China team" change the future?

Inscription: Numbers are life.

On August 10 this year, the Deputy Director of the Central Bank Payment and Settlement Division Mu spoke at the "China Financial Forty Forum" and mentioned that after five years of research, the central bank's digital currency can be said to be ready. The news came out and inspired the digital currency industry.

In the future world, perhaps human beings are the carriers and presentations of data. The understanding of property rights is also realized by the physical real possession of the virtual world. We expect data exchange, a more convenient era will come. .

Digital Currency

The central bank's legal digital currency, referred to as DC, is Digital Currency; combined with the application of digital currency in China, EP must also be mentioned, namely Electronic Payment.

Since 2014, China has officially deployed the possibility of issuing and issuing the central bank's digital currency. To this end, China's cryptographers, scientists, government organizations, etc. have all made tough efforts. It is reported that since 2018, the Central Bank Digital Currency Research Institute has started the fast-paced operation of 966. The development of related systems is underway, and the “national team” of digital currency is on the horizon.

Face the challenge of "high concurrency"

Female readers, remember the madness of our double eleven years last year? According to estimates, the peak of the transaction of the network at that time reached 92,771 transactions per second , compared to the reality of Bitcoin and Ethereum 7 to -20 strokes per second (Libra of Facebook's protagonist is also 1000 transactions per second).

If China's digital currency adopts a single block of traditional blockchain, it can be imagined that it cannot meet the trading needs of “retail-grade” M0.

Therefore, we found that DC\EP adopts a two-tier operating system : the central bank does not directly issue digital currency to the public, but the central bank transfers the digital currency to various commercial banks or other legal operating structures, which are then redeemed to the society. The public is available for its use.

Therefore, we can judge a business opportunity. In the future, major commercial banks will inevitably compete for “the second issue right of digital currency”. For this reason, they will purchase financial technology services, network security services, storage performance improvement technologies , and will also go out. Strive to "sell" to seize the digital currency retail highlands.

At this time, the surrounding service industry will have a chance to make money, please pay attention to business opportunities.

Digital currency is also "legal currency"

Education for financial consumers will be another topic. Since people's awareness is often behind social development, mobile payment has changed the payment habits of many people, but put a hot wallet on the mobile phone and store the digital currency. In case of being attacked by a hacker? Who will manage it? Does digital currency have the same "infinite" legality as the paper money in the physical world?

According to the speech of Deputy Director Mu, “In order to ensure that the central bank’s digital currency is not over-represented, commercial institutions will pay the central bank 100% in full, and the central bank’s digital currency will remain the central bank’s debt, which is guaranteed by the central bank’s credit…”

In other words, the digital currency issued by the central bank is not a "stable currency", that is, the renminbi deity, but a digital renminbi.

Technology is iterable

We always worry that the technology we just used will fall behind in a few years; the law is the same, using historical behavior as a script to judge the current situation, and ultimately to restrain people's future behavior, always worry about outdated OUT, so We will always make a little extension or forward-looking provisions for the legal provisions.

In China, this logic is similar. The central bank has made up its mind to promote the application of digital currency, and is worried about whether the blockchain technology will be iterated or replaced in the future. Therefore, it leaves room for it to be “ long-term evolution technology ”. It is a good way to "do not be a gentleman."

Maintaining the advantages of Party A , what technology is good in the market, what technology to purchase; which technology is used by the people to accept which technology, no matter which technology dark horse wins the game, the central bank will smile slightly and optimize the market to the best. Technology is applied to the “two-tier operating system”.

Centralization of encrypted assets

Adhere to the centralized management model, behind the deep meaning and logic, we do not speculate. What our people look at is whether this can protect our property and whether it has a good effect.

Let's sort out the reasons for the central bank:

(1) The digital currency is a legal currency, which is the central bank's liability to the public. This legal relationship is stable and the central position of the central bank is also stable .

(2) The central bank has macro-prudential and monetary regulation functions.

(3) For commercial banks and other institutions to exchange digital currency, the central bank needs central management .

(4) Maintain a dual account system , maintain the original monetary policy transmission mode, and maintain the central bank's central management status.

We understand that in order to smoothly promote the wide application of digital currency, it remains a pragmatic and efficient way to maintain the original monetary policy transmission mechanism.

Power to issue digital currency

From an international perspective, almost every country's "central bank" or "X Federal Reserve" and "Finance Hall" have begun to study the issuance and operation of digital legal currency. However, the thunder and rain are small, this time the expression and future of the Chinese central bank officials The issuance of a probable digital currency can basically judge that China’s digital currency issuance will be at the forefront of the world .

On the one hand, because China has a large number of electronic payment consumer groups and the established mobile payment habits, on the other hand, the rise of blockchain technology in China, reserves a large number of technical talents and teams.

Of course, from the speech of Deputy Director Mu, we found that the central bank's digital currency can be easily circulated like cash, which is conducive to the circulation and internationalization of the renminbi. At the same time, it can achieve controllable anonymity . We must ensure that both parties are anonymous. At the same time guarantee "three anti-" (anti-money laundering, anti-terrorism financing, anti-tax evasion), a balance should be drawn between the two.

My sister feels deeply when dealing with international digital money laundering and fraud cases. The anonymity of digital currency has brought a lot of vitality to many upstream crimes.

At the same time, we found that the digital currency traceability is not a piece of iron when we cooperate with the evidence retrospective technical team. As long as it is sprinkled with "phosphor" , no matter which exchange, which corner of the world, it can find clues, it will Certain evidence is fixed and is prosecuted in a country or jurisdiction with jurisdiction. (China's implementation of digital currency, perhaps in the future can effectively prevent the abuse of poverty alleviation funds , strict monitoring of civil servant wages, etc. to prevent corruption)

Target M0

According to Deputy Director Mu, “At this stage, the central bank’s digital currency design focuses on the replacement of M0, not the replacement of M1\M2. This is because M1\M2 has now been electronically and digitized. Because the latter is Based on the existing commercial bank account system, there is no need to digitize digital currency again…

In contrast, existing M0 (banknotes and coins) are easy to be forged anonymously, and there are risks for money laundering, terrorist financing, etc … So, our DC\EP design maintains the attributes and main features of cash, also Meeting the needs of portability and anonymity is a good tool to replace cash.

Seeing this, the first reaction of my sister is that the form of the crime of forging and fabricating money will be diversified in the future . The movie "Unparalleled" (Chou Runfa and Aaron Kwok, who starred in the movie), which we watched before, tells the strange case of making counterfeit money in the Golden Triangle. In the future, the friends of these painters may be much smaller. Once the digital currency becomes the mainstream of cash, then a brush can't change Money in the digital world , haha.

At the same time, we can imagine that the phenomenon of robbing banks and taking cash with steel helmets in the future will gradually decrease. Just like the current bus pickpockets, few people now bring wallets, and mobile phones are unlocked every five minutes like human organs. It’s hard to start (it’s the language of a theft suspect).

Written at the end…

We believe that the future digital legal currency will be highly recommended to the public, and we believe that this is the trend of the times, no one can afford to be a car.

However, we recommend that smart contracts be carefully loaded , especially in the moment, money is money, don't make money to anchor something that is definitely worthwhile. Once the digital legal currency becomes a valuable bond and becomes a common credit certificate that is not money, no one believes it.

By then, we can foresee that the price of gold will be soaring. Therefore, the digital currency is gradual and steadily implemented .

Readers may be surprised that people who have always supported digital currency and innovation have been conservative. They have recently read some books and understood some truths in the book. We cannot take rationality from what is urgent. I will fully consider the consequences of taking the lead and moving the whole body. If the consequences can be tolerated, I will try to innovate. If the consequences are unbearable, I will be conservative.

There has never been a "new trick" in the world, only the "pros and cons" after seeing the reality.

I wish the domestic digital currency to be launched smoothly and look forward to a better future! !