Why does China have to seize the opportunity to issue central bank digital currency?

In 2014, the People's Bank of China set up a special research team under the leadership of Zhou Xiaochuan, then president, to conduct in-depth research on digital currency issuance and business operation framework, key technologies of digital currency, distribution and circulation environment, and legal issues. On November 4, 2019, the Central Bank Digital Currency Research Institute and Huawei signed a memorandum of cooperation on financial technology research. China's numerous innovations in digital currency are enough to make the world taboo, but why not step back?

U.S. Darkness Strategy

Zuckerberg attended the US Congress hearing on October 23 and said to Libra that "when we discussed the Libra project, other countries did not move. China is taking action quickly and is expected to be in the coming months. Introducing a product similar to Libra. "The obvious enemy of China has not made the parliament release libra, but this may be just an external performance. In fact, during the hearing, Zuckerberg and Trump secretly shared the White House. Into the dinner, this is the news that broke out in recent days. I was staying at the important moment of official announcement. I just didn’t expect Facebook to explode on November 7th. The US public is very angry about Facebook’s data disclosure. Cambridge Analysis of data breaches, the US Federal Trade Commission to calm down the public anger against Cambridge analysis Zuckerberg issued a huge ticket of 5 billion US dollars, refreshing the largest ticket record before the FTC, in fact, the hearing is mainly intended to let Zuckerberg To give the public a promise and guarantee in data protection, is not to question its ability to develop digital currency, who is expected to be so disappointing with Facebook. Trump estimates are distraught deplored roar: Mark, You are fired.

Yesterday, the Federal Reserve announced that the central bank's digital currency has begun research, but there is no release plan; Federal Reserve Chairman Powell said: The Fed has started research on the central bank digital currency (CBDC). But compared to some countries and private institutions that are actively engaged in digital currency research, the United States does not seem to have much demand for this. The current demand for cash in American society is still strong. What is the potential meaning? The American people are still full of confidence in the hegemony of the US dollar in the transaction, recognizing the value of the US dollar. To achieve cashless countries and regions because of the lack of confidence in the national currency, the demand for digital currency is inevitable. The United States is high, and Powell’s core meaning is that the US dollar remains the guarantee of US leadership in the financial sector. There is not much demand for issuing digital currency!

But why not study if it is not issued? Despicable, from the attitude of Libra, you can understand this purpose, the fierce quarrel at the hearing to whitewash, but Libra's advancement has never been delayed, and later will sort out a timeline for everyone to see, if not for this scandal Unprepared, Libra did not rule out the birth.

In October 2016, the RMB was included in the special drawing rights currency basket, and the internationalization road went further. As the world's second largest economy, the international influence of the RMB is increasing day by day, and the popularity of domestic digital currency third-party payment systems is also leading the world. In August, Li Xianlong said that China Mobile’s payment said that Singaporeans are like townships. Recently, Hong Kong’s riots have caused many Hong Kong patriots not to use Alipay in the Mainland. Why is China eager to issue digital currency?

1. After World War II, the world's financial operation was based on the US dollar-centered international monetary system, which is the Brinton forest system. The US dollar is directly linked to gold. The currencies of various countries are linked to the US dollar, which makes the US dollar the major reserve currency and international The trade payment currency actually determines the dollar's leading position in the international currency. With the economic recovery of countries after the war, especially in European countries, this system was challenged and eventually disintegrated during the Nixon period. Since then, despite the diversification of the international monetary system, However, it still remains centered on the US dollar. To a certain extent, the leading position of the US dollar is still there, and the inequality in international trade has become more serious.

2. Facebook's Libra issue was killed, not necessarily refusing to cooperate with the US government. Facebook already has the technical ability to issue digital currency and has a total of 2 billion users. Once it cooperates, the US central bank's digital currency is equivalent to having a rocket. The booster, with the existing status of the US dollar, the first to issue digital currency will undoubtedly get the hegemonic key again.

3. If China encounters great resistance in the original international trading system, even if the US dollar hegemony is reduced, it is difficult for the RMB settlement system to replace the US dollar system in settlement and payment, because trading habits are very difficult to change. Unless a new model can be opened, it is like Taobao subverting traditional shopping methods to open a new online shopping model. Digital currency is an opportunity for China to improve the international status of the renminbi, traceable, encrypted, distributed storage blockchain technology. These characteristics will inevitably make the digital currency reduce links and save costs in the transaction, thus greatly improving circulation. The profitability will inevitably make the digital currency an inevitable choice. After the international status of the RMB is raised, the Belt and Road Economic Circle and other foreign international trade will be extremely With great development, China's overall national strength will naturally be enhanced, and there will be fewer obstacles on the road to development. This is also an important reason why the central bank's digital currency is stepping up.