Original: Shanghai Securities Journal
The 2019 China Finance Association Academic Annual Meeting and China Finance Forum Annual Meeting will be held in Beijing on the 21st. Chen Yulu, deputy governor of the People's Bank of China, said at the meeting that more and more central banks and monetary authorities have started to pay attention to the challenges of public policies such as currency stability, capital control, and payment system supervision.
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Chen Yulu said that the first is the impact on the payment system . The use of stablecoin may bring two challenges. On the one hand, stablecoins have great potential in reducing payment costs, but their transaction and payment information is independent of the existing payment system, and it will also bring challenges to the supervision of central banks and monetary authorities. On the other hand, the stable currency issuance mechanism is different from the central bank's currency issuance mechanism. Under the current balance sheet mechanism, whether it can fully assume the function of payment settlement is uncertain.
The second is the impact on financial stability . The stablecoin may weaken the effect of capital controls and affect domestic financial stability. The global stablecoin represented by "Libracoin" provides great convenience for cross-border capital flows, but it may also have an impact on cross-border capital flows in some economies. The weakening effect of capital controls may affect domestic financial stability.
The third is the impact on monetary policy . The global stablecoin will impact the currency sovereignty of a country. The potential user base of stablecoins is huge and may have systemic importance in individual jurisdictions, replacing the current currency nationwide and even globally . The stable currency poses a greater threat to the weaker currencies. After the impact of monetary sovereignty, the most direct impact on a country is the decrease in the effectiveness of monetary and fiscal policies. From the perspective of monetary policy, on the one hand, stablecoin may weaken the bank's ability to create credit and reduce the effectiveness of monetary policy. On the other hand, stablecoins may also reduce the stability of money demand and make it more difficult to formulate monetary policies.
The fourth is the impact on the international monetary system . The international use of stablecoins, especially those that are anchored or mainly anchored to the US dollar, may further strengthen the dominant position of the US dollar in the international monetary system and curb the development of the multipolar international currency system, including the internationalization of the RMB.
Chen Yulu said that five years ago, the People's Bank of China initiated research on digital currency and research and development of legal digital currency (DC / EP). On the one hand, it is necessary to strengthen the adaptability of the fiat currency system to the future digital economy ecology; on the other hand, it is also necessary to meet the challenges of the global stablecoin. Of course, the issuance of sovereign digital currencies also has a “narrow sense of bank” effect, which requires us to provide corresponding theoretical innovation results and corresponding policies. (Huang Zihao)