"The study of the central bank's digital currency has been going on for five years, and now it can be said that it is ready to go."
On August 10, at the 3rd China Finance Forum for the 40th Yichun Forum, Mu Changchun, Director of the Payment and Settlement Department of the People's Bank of China, announced the explosive news.
What is the central bank digital currency? And why is it that the upcoming release of the central bank’s digital currency is explosive?
Don't worry, and listen to the minibus slowly.
We know that the digital currency is abbreviated as DIGICCY, which is an abbreviation of English “Digital Currency”, which is an alternative currency in the form of electronic money.
As the name suggests, the central bank's digital currency refers to the digital currency issued by the central government. It belongs to the central bank's liabilities and has national credit, which is equivalent to legal tender.
The central bank's digital currency is not the same as other central banks' digital currencies. Its English abbreviation is called "DC/EP."
Yao Qian, former director of the Digital Money Institute of the People's Bank of China, once referred to the central bank's digital currency as "the jewel in the crown of financial technology . " He said that the central bank's digital currency has a huge impact on the future development of the financial system.
The number of countries that have already launched the central bank's digital currency is six, namely Ecuador, Tunisia, Senegal, Marshall Islands, Uruguay, and Venezuela. Others say that they will not consider launching central bank digital currencies, such as Australia, New Zealand and Japan. The benefits have not yet been seen; and China’s view has always been “planned launch”, of course, this plan has been going on for five years.
Since 2014, the central bank has been active in digital currency research and development. As of August 4, 2019, the Central Bank Digital Money Research Institute has applied for 74 patents involving digital currency.
Since last year, the relevant personnel of the Digital Money Institute have started working overtime to develop, but before the mysterious central bank digital currency really unveiled, we still have a lot of doubts.
For example, what is the difference between the central bank digital currency that China is about to issue and Libra, which has been hotly debated before? Once the central bank’s digital currency is issued, what impact will it have on our monetary policy? How will our life be changed? Let's listen to the big picture.
First, the Chinese economy can now make its currency convertible as quickly as possible, far more important than digital currency.
It is an idealism to use digital currency to promote the internationalization of the renminbi. After all, the hegemony of the dollar has great uncertainty in the short, medium and even long term. It is difficult to eliminate or replace it.
Moreover, digital currency utilizes the network effect. From a network perspective, the information I get is: Basically, the Internet or big data in the world is dominated by the United States. Its technology, strength, scale, and the resulting leadership and dominance are Very strong.
In this case, the hot spot of digital currency may actually weaken the process of real free convertibility of the RMB. Moreover, we are concerned about the security of financial assets, rather than fantasizing about solving the current real problems and deep-seated problems in China by a so-called new currency model.
Secondly, in China today, there are too many imaginary things, too few real things, and we need to be pragmatic.
If the blockchain technology is good for the real economy and for the enterprise, I think it can be promoted. But so far, I have not really seen where it is promoting the real economy, what kind of performance will be brought about, and what kind of rate of return will be generated.
At present, China's financial department is in the process of adjusting its structure. We must turn it into "financial supplementation and economic entities as the mainstay." Our currency size also exceeds the real economy and needs to be adjusted. If the concept of digital currency is still dominated by the financial level, then it is doubtful whether it will promote the real illusion.
So I stand in a neutral position. The digital currency of the central bank is a new thing. I should support it, but from the perspective of China's reality, I may be opposed because it will make our focus not particularly precise, and even spread our combined strength and the original intention of our reform.
In the past five years, the main difficulty faced by China's R&D central bank digital currency is to emphasize “digital” or “currency”. In vernacular, it is to emphasize “technical innovation” or “monetary attribute innovation”.
The reason for accelerating the pace from last year is simple: the world's major central banks are all involved in the study of digital currencies, such as the "star plan" of the European Central Bank and the Bank of Japan, the dispute between the Federal Reserve and the "narrow bank" and so on. As one of the most important central banks in the world, the People's Bank must be among the first group of digital currencies.
Some people also compare the central bank's digital currency with Facebook's Libra, but the two are very different. Libra is built on the credit of French currency and is bound by the central bank and financial institutions. The digital currency of the central bank is a technological upgrade of the legal currency – the digital upgrade of the original central bank currency (M0) has essentially not changed the bank deposit reserve and The currency attribute of the cash.
Its specific scenario is mainly to serve the payment side managed by the central bank – such as the transaction between bank reserves, and the digital upgrade of cash, not so mysterious.
But it does bring convenience. For example, the "counterfeit currency" problem will disappear with the digital currency directly holding the central bank (instead of the original cash); the anonymity of the banknote will no longer exist, and the transaction information can be retrospectively controlled. ……
For ordinary people, transactions and payments are in the central bank's digital currency payment network, and the convenience is improved, while privacy is gone.
The research and release of digital legal currency is inevitable because it is both a problem of currency development trend and a national strategic level issue.
From the inevitability of currency development, money must develop in the direction of low cost, reliability and convenience. Generally, the equivalents must be more and more separated from the entity, and its form is more and more free. It can be said that password tokens are the mainstream development direction.
In the case of digital currency alone, the application of blockchain technology is an inevitable trend, and Libra's release confirms this. Previously, because of the disordered and barbaric growth of ICO, some people proposed the concept of “no-coin blockchain”, requiring blockchain technology to be separated from the issue of Token, but this will apply and develop blockchain technology, as well as digital legal currency. Construction has a certain impact.
From a national strategic perspective, legal digital currency is related to whether China can gain an international competitive advantage in the digital economy era. China's mobile payment is in a relatively leading position in international payments, but this advantage is not absolute. The release of Libra has sounded the alarm for our country and may have a huge impact:
First, it constructs a model similar to the global Alipay, which will gradually jump out of the original payment system and supervision system, and establish a new cross-bank, cross-border, cross-country digital currency virtual account trading system. This is likely to interfere with or even replace the monetary sovereignty of some countries. What's more, it may further reduce the space of the renminbi in the international arena, which will have a negative impact on China's "going out" and "Belt and Road" strategies.
Moreover, this is also vying for data traffic entry in a higher dimension. In the future, the competition for data resources will inevitably become more and more serious. China's payment field, especially in the field of small-scale retail payment, will face more challenges. The best way is to launch a legal digital currency to deal with it. At this level, the introduction of legal digital currency by the central bank is also conducive to the growth of China's payment industry.
Over the years, digital currency has shown great vitality. The central bank may also think that digital currency will become the trend of the times, so it began to plan ahead.
In the foreseeable future, traditional French currency is clearly still the main medium of circulation in the social economy. Digital currency will be an attempt and supplement for the time being.
In fact, digital currency is a kind of "digital contract". Therefore, if the central bank introduces digital currency in the future, I suspect that it should not be used on a large scale for daily payments, but mainly for financial settlement between institutions. In fact, as an advanced accounting tool, financial accounting, auditing, etc. are precisely the areas where blockchain technology is likely to shine. Digital currency itself is just one application of it.
Benpian Author: F-jun, seventeen
Text / Ba Jiuling (WeChat public number: Wu Xiaobo channel)