Digital currency silent smoke: Alipay RMB and Libra USD

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Figure 1 European Central Bank President Christine Lagarde

European Central Bank President Christine Lagarde stated in a reply to the European Parliament:

The goal of stablecoin programs such as Libra is to address the deficiencies in cross-border payments by establishing a new and independent payment ecosystem that does not rely on existing clearing and settlement processes. Through this system, their goal is to provide lower cost, more efficient payment solutions and promote inclusive finance.

Digital currency, haha, domestic Alipay and WeChat have already done it.

Alipay 1.0: Alibaba's Virtual Currency

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Figure 2 Ma Yun and Ma Huateng

Earlier Alipay was completely private account of Jack Ma and the bank. All payment behaviors that occurred in the Alibaba system were performed outside the bank's system, similar to Libra, but not on the blockchain.

To date, this system is still independent of the bank, but it is unified under the network and UnionPay to clear through the "broken direct connection".

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Figure 3 Third-party payment-virtual currency system

Through Alibaba's e-commerce scene, Jack Ma took the risk of being caught, established an independent payment system, and obtained a license innovatively.

Alibaba's market value is $ 567.4 billion, and Ant Financial's valuation is $ 153.846 billion. Jack Ma has already publicized that Alibaba's digital economy has been realized.

Among them, 960 million Chinese users serve 70% of the Chinese population. At the same time, as of June 2019, Alipay and its local wallet partners have served more than 1.2 billion users worldwide.

Alipay is Alibaba's virtual currency in the economy.

Alipay 2.0: Central Bank Digital Currency?

In fact, through the two major policies of "broken direct connection" and "100% reserve funds deposited in the central bank", our RMB has been digitized.

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Figure 4 Third-party virtual digital currency system under central bank supervision

Under the leadership of former Governor Zhou Xiaochuan, the RMB has quietly been digitalized through Alipay and WeChat. According to data from iResearch, the scale of China's third-party mobile payment transactions reached 190.5 trillion yuan in 2018, of which Alipay continued to rank first with 53.21% share, and Tencent Finance continued to rank second with 39.44%.

Needless to say, the ability to use blockchain technology is called digital currency, which is the point of view of speculators. However, once this was done, the tiger was released.

Why, because Alipay is M0, the credit of Alipay is the credit of the central bank, which is good for the people, because our money in Alipay is safe, because it entered the balance sheet of the central bank.

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Figure 5 The balance of third-party payment reserves in the balance sheet of the central bank

Figure 5 is the balance sheet of the central bank, where non-financial institution deposits are the client reserve deposits placed by third-party payment institutions with the central bank. The data at the end of November was 1.478944 trillion yuan, accounting for 18.64% of the "currency issuance".

The so-called "currency issuance" mainly refers to "currency in circulation" and "bank inventory cash". "Currency in circulation" is what we usually call currency circulation statistics M0.

In the past, the "currency issuance" projects were generally generated through commercial banks. Commercial banks withdrew cash from the central bank. Part of this cash was circulated among nationals, and the other was stored in commercial banks for future use.

Now, Alipay has replaced banks, let us have a direct relationship with the central bank. And our Alipay is digital, this is the real central bank digital currency.

Jack Ma owns the central bank's digital currency. Why does the central bank still say "the central bank's digital currency is ready to come out"? Isn't this already out?

It turned out that Alipay is a set of digital currencies that put the bank aside. It used to be directly connected by the bank, but now it is OK, disconnected directly, and connected directly to the central bank using the Internet.

Resolving regulatory issues has also given Alipay more central bank-level credit.

Alipay RMB and Libra USD?

Alipay 2.0 is the 1.0 version of the central bank's digital currency. This need not be debated, but it is also the progress of the times. Digitalization is unstoppable.

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Figure 6 Digital currency transaction scale

The difference between the new Alipay digital currency and the bank's electronic payment is the difference in credit.

The banking system runs the accounting currency M2, while the new Alipay digital economy operates in theory as the central bank's digital currency M0.

But is the new Alipay really running M0 in Alibaba's digital economy? Jack Ma knew it.

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Figure 7: Jack Ma speaks at the Second World Intelligence Conference

Ma Yun spoke at the Second World Intelligence Conference and said:

"Investing in blockchain is because Alibaba has no way to spread the information of other people's networks, including social media. Blockchain is not required. We do this internet finance, and we have trillions of transactions on the Alibaba trading platform With tens of trillions of transactions, no blockchain is dead.

Alibaba must have a blockchain, but we didn't think that this thing could be turned into Bitcoin to make money. "

However, since the release of the Libra white paper, Jack Ma should not be able to sit still, because the level of competition has risen to the currency itself.

As the digital economy enters the era of blockchain, Alipay RMB and Libra USD compete.

On December 19th, Ant Financial announced that it will comprehensively accelerate the three major strategies of globalization, domestic demand and technology. An internal letter issued by Ant Financial Group Chairman Jingxian Dong stated:

This year marks the 20th anniversary of Alibaba and the 15th anniversary of Alipay.

From the introduction of a secured transaction mechanism 15 years ago to solve the problem of distrust between buyers and sellers on Taobao.com, new technologies including blockchain technology have been used to solve the problem of trust.

For 15 years, we have been dying of the human society issue of "trust." We believe that using digital technology to solve this problem can greatly reduce the cost of trust in the business field and help "let the world have no difficult business." Things are getting closer to reality.

Inter-chain pulse statistics, Ant Financial has already acted:

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Can we just close the door?

Chen Yulu, deputy governor of the central bank, mentioned recently that "global stable currency represented by" Libracoin "as a cross-border flow of capital has opened up new channels to allow funds to freely enter and exit the financial markets of regulated economies."

In fact, when the door is closed, ordinary people can only be shut down. In order to obtain Libra, ordinary people will be targeted by various scammers.