Yao Qian: The new currency war has just begun

This article is the full text of the preface to the new book "New Currency War" by Nobit Hailin's new book, Yao Qian, China Securities Regulatory Commission. Authorized by the publishing house, "Carbon Chain Value" is exclusively released for readers.

Regarding currency, people seem to care more about its value connotation, and the technology behind it seems less interested before the emergence of electronic currency and digital currency. This is an era of credit currency. In the eyes of many people, currency is the number in a bank account. As long as the bank does not fail, it will be there. In addition to transaction transfers, currencies often move based on value. Wherever the value is more stable and the income is higher, the currency moves wherever it is. Between the movements, currency substitution occurs, either into capital or into other forms of currency (asset). These stories can be big or small, and small ones can cause all kinds of tragic comedies in the world, and large ones can lead to "wars" in order to snatch currency dominance, such as exchange rate wars that are neighboring to each other, various trade / currency unions, international currency system reforms and games Wait.

If the currency substitution due to value connotation is "classical currency war", then the currency substitution caused by technological advancement can be called "new currency war". Of course, this is not a new thing. We have already seen the traces of technology in the history of currency evolution. For example, the reason why gold has replaced other materials to become a widely accepted currency is not only because it is scarce, but also because of its technical characteristics, such as easy Standardized, separable, easy to carry, stable materials and not easy to deteriorate. It's just that history is too long, and people gradually ignore the role of technology. With the rise of the modern information technology revolution, the impact of technology on currency is reaching a state never seen in history, and will continue to be interpreted, expanded and deepened. It not only occurs between various currency levels such as cash and deposit currency, but also occurs in the currency competition of various countries, and may even trigger the reform of the entire monetary and financial system, thus attracting widespread attention from all walks of life in the world.

In a sense, this "new currency war" can be traced back to the 2008 global financial crisis. The outbreak of the financial crisis has widely questioned the reputation of the central bank and the credit intermediary function of the entire financial system. The ideas of the Austrian school have revived, and the number of supporters of currency "denationalization" is increasing. In this context, the decentralized programmable currency represented by Bitcoin, which is not supported by the value of sovereign state credit, "was born." Some people even call it digital gold, pinning the dream of replacing fiat currency. This is the "war" between private currency and fiat currency brought about by the development of information technology. It is also the challenge of fiat currency caused by the "denationalization" of currency.

Another kind of "new currency war" is the challenge of electronic payment to cash. In recent years, the usage rate of non-cash payment methods such as Alipay and WeChat payment has continued to surge. The words "cashless society" and "cashless city" have appeared frequently in the media, and even become a slogan for some third-party payment institutions to promote their businesses. Closely related to it, the central bank currency of many developed and emerging market countries has decreased in the proportion of the total currency total. Since 2003, the ratio of China's base currency to M2 has fallen by 5%, India has fallen by 7%, and the Eurozone has fallen by 3%. Part of the reason is that central bank currencies (especially cash) are replaced by more technologically advanced electronic payment methods and even private currencies in the field of circulation.

Perhaps, we should positively view and interpret this "new currency war." Because it promotes the improvement of payment efficiency, financial inclusiveness and the rise of social welfare as a whole. The Libra white paper states: "Libra's mission is to build a simple, borderless currency and financial infrastructure that serves billions of people." Now, its grand mission may not necessarily succeed, but for such a vision, we It should be actively responded, at least in terms of technology or model, it provides us with new references and options that are beneficial to social progress. For fiat currencies, the "de-cashing" slogan of private payment instruments and the rise of "decentralized" digital currencies are more like a Morning Call. Waking up the central bank should pay attention to the stability of fiat currency value and awakening The central bank cannot ignore the unavoidable technological wave of digital cryptocurrencies, awakening the central bank should pay attention to the integration and innovation of central bank currency and digital technology …

This wake-up effect has begun to appear. Taking China as an example, as early as 2014, the People's Bank of China formally launched the legal digital currency research to demonstrate its feasibility; in 2015, it continued to conduct research on nine major topics; in 2016, the People's Bank of China Digital Currency Research Institute was established. The author bowed in time. The Central Bank Digital Currency Research Institute has developed a quasi-production-level legal digital currency prototype system based on China's "central bank-commercial bank" binary system. After 2016, the central banks of various countries also started to carry out experiments on central bank cryptocurrency based on blockchain technology, such as the Jasper project in Canada, the Ubin project in Singapore, the Stella project of the European Central Bank and the Bank of Japan, and the Inthanon project in Thailand There is also the LionRock project in Hong Kong, China.

This is a brand new track! Participants included the private sector, the public sector, sovereign states, international organizations, financial institutions, technology companies, industry alliances, geeks, economists … Overall, this "new currency war" It has just begun, and there are many areas that need to be researched and discussed, such as the battle of technological routes, digital privacy protection, government regulation, social governance, network and information security, currency sovereignty, financial infrastructure innovation, and risk prevention.

It is hoped that the publication of "New Currency War" will provide readers with a broader and deeper perspective and insight. What needs to be reminded is that the content about the Eastern countries, or Said ’s so-called “Orientalism” color, inevitably wears colored glasses, is not necessarily objective, and needs further discussion and discussion, hope readers to treat it dialectically.

Is in order.