Wang Yongli, former deputy governor of the Bank of China: BTC completely violated the logic of currency development

What is the nature of money? What is the watershed between good finance and bad finance? You may wish to return to the source and understand the nature of money and the logic of finance.

What is money in the end? Today, the modern economy is becoming more and more monetized. Money has become an indispensable element of people's life and social activities; but the concept of money has become increasingly blurred and even alienated.

Since the currency has been produced, its performance and operating mechanism have been constantly changing, especially from “physical currency” to “credit currency”, from tangible currency (physical currency, banknotes and currency) to “intangible currency” (deposit Currency, electronic money, digital currency, etc., have undergone fission from both mechanism and form, making people's research and cognition of money more and more deviate from reality, unable to keep up with their real changes, and thus there are many cognitive Mistakes, and even a lot of plausible strange arguments and shocking rhetoric:

For example, "money is trust", as long as it is something that people generally trust and accept, it can become a currency, without the support of the state at all; commercial banks simply do not have the idea of ​​"first deposit, then loan" or "deposit". Because the loan is an important channel for credit money, the bank can increase the deposit by issuing loans. In fact, it is the first loan and the later deposit. The currency is the bond of the issuer (the central bank) under the metal standard, and under the credit currency system. Become a national stock and so on.

Especially after the emergence of "decentralized" network "cryptocurrency" such as Bitcoin, some people began to separate the currency from the economic field and rose to the height of philosophy and metaphysics to interpret and imagine, thinking that money should exclude human intervention and hand over God (the decentralized mathematical encryption method) manages to completely subvert the existing centralized legal tender currency system; the generation and development of money has nothing to do with exchange, and has nothing to do with the value of assets. Money has only one mission, that is, And defend the value of people" and so on.

These statements are like smog making the air turbid, making people's cognition and grasp of money more and more chaotic, and even affecting the judgment and grasp of the economic situation, as well as the formulation of monetary policy and the regulation of monetary aggregates. . This situation is worrying, and it is urgent to clear the source and figure out what currency is!

One

This starts with the emergence and evolution of the “tangible” physical currency, and clarifies why a country’s total monetary balance should maintain a dynamic balance with its wealth.

The emergence of surplus labor and the development of exchanges between different surplus labors require value scales or exchange media.

In the context of certain social exchanges, the most popular objects (substantially dependent on the preferences of social authority) are used as exchange media. This kind of exchange medium becomes the prototype of "currency", that is, the physical currency of goods, which itself belongs to the most highly sought after commodity in society.

In the course of practice, people gradually discovered that to continuously improve the efficiency of exchange transactions, the physical goods that act as money need to meet increasingly stringent conditions. Finally, there is no life, the quality is relatively stable, it is easy to divide the value level, and the items that the society mainstream pursues, such as special shells, bones, feathers, etc., begin to act as currency items. With the discovery and progress of metal mining and smelting technology, precious metals that are more in line with the characteristics of money have begun to gradually replace other items and become the first choice for currency items. Finally, the major economies are basically concentrated on gold and silver.

The evolution and unification of money has greatly improved the efficiency of exchange transactions and promoted the development of economy and society.

With the improvement of the currency, people have made innovations in the settlement method: between some merchants with strong strength and stable business dealings, they began to try the method of “daily accounting, regular liquidation”, that is, daily business transactions, not carried out. The currency clearing is done on a case-by-case basis, but the signature is drawn to clarify the relationship between the two parties. The two parties can record the accounts accordingly. On the agreed date, the accounts of the two parties are checked and summarized, and the difference is partially cleared and cleared. In this way, the daily circulation and liquidation costs of metal currency are greatly reduced. On this basis, organizations that specialize in currency exchanges, such as money houses and ticket numbers, have been developed.

In the case that a bill of exchange or a silver ticket can be guaranteed to be fully converted into a metal currency in a timely manner, and then widely accepted by the society, it is further found that as long as there is sufficient redemption guarantee, the bill itself can replace the metal currency for daily circulation, only It is necessary to split the notes recording the total amount of metal money into standardized money tickets of different grades. Therefore, a kind of pre-printed, indicating the drawer (ie, the payee), the face value, the drawer promises to pay at the sight of the ticket (the holder pays the bill to the designated institution of the ticket, after verification, The institution will redeem the metal currency corresponding to the face value to the holder. It will no longer record the new paper notes that the holder can freely transfer. This type of paper bill has become the prototype of banknotes and is constantly being refined and standardized.

Of course, at this stage, banknotes are only substitutes for the daily circulation of metal currency. They are based on metal currency and are guaranteed. Therefore, they are also called banknotes under the “metal standard system”.

As trade expands and prospers, the demand for money expands. However, subject to the limitation of the supply of money metal, the amount of money actually available often deviates significantly from the level of trade and economic development, often causing serious inflation or deflation, but it is seriously harmful to trade and economic development.

As a result, people gradually realize that with the development of trade and economic society, money is becoming more and more important and functions are becoming more and more abundant, but the most fundamental function of money is “value scale” and “exchange medium”. The function of a good currency "value scale" must strive to maintain the relative stability of the currency. To this end, it is necessary to make the total amount of money in a country correspond to the scale of social wealth that can be legally protected and that needs to be monetized within the sovereignty of the country. In short, it is to keep a country's total amount of money in balance with its wealth.

Therefore, it is first necessary to separate the currency from social wealth. The precious metals that originally acted as money must withdraw from the monetary stage and return to the origin of their social wealth; the money should be separated from social wealth and become the value counterpart and character of social wealth.

Under the circumstances that the social wealth is complicated and the prices of various commodities may be frequently changed due to the relationship between supply and demand, how to maintain the dynamic balance between the total amount of money and the scale of wealth, and thus maintain the relative stability of the currency value?

Therefore, people have designed a concept and indicator system of “the total social consumer price index”, select the price of representative consumer goods in the society, and give them a certain index share to observe the change of the total index, as long as the price The fluctuation of the total index is within the expected range, and the currency value is considered to be basically stable. If the price index is likely to break through the expected target, it is necessary to implement reverse currency regulation. As a result, “monetary policy” has emerged, and together with fiscal policy, it has become one of the two major policy instruments for macroeconomic regulation and control in modern society, playing an increasingly important regulatory role.

Of course, monetary policy pursues the basic level of social prices and the basic stability of the currency, rather than absolute stability. This is not only because the larger the country, the more developed exchange transactions, the more difficult it is to maintain the absolute stability of prices and currencies, and it has also been found that maintaining a moderate depreciation of the currency will encourage people to invest more and consume, and reduce savings (social The idleness of resources is conducive to promoting economic and social development and moderately adjusting the distribution of social wealth. Therefore, all countries in the world are not pursuing zero inflation. The major economies basically set the target at 1%-3. % interval. Of course, money can only be moderately devalued, and it must be controlled within the expected range. Otherwise, if it is out of control and there is serious inflation, which threatens the survival of many people, it may lead to serious currency crisis and severe social unrest, and even The collapse of the monetary system.

Therefore, the basic orientation of monetary policy should always be steady progress, that is, to pursue the basic stability of the currency, to prevent serious inflation or austerity, and to effectively play the basic function of the "value scale" of money.

two

Look at the generation and management of "intangible" credit money. This involves the boundary between the central bank and the commercial bank under the credit currency system.

The development of currency finally led to the complete withdrawal from metal materials and physical forms such as gold and silver, and turned into a brand-new "credit currency", realizing a profound and profound fission in the history of currency development. And sublimation re-engineering.

After the currency is converted from a metal currency to a credit currency, it is freed from the limitation of the supply of money and metal. People can more flexibly regulate the total amount of money and maintain a dynamic balance with the scale of wealth, thus maintaining the basic stability of the currency.

Of course, the loss of the metal supply limit, while enhancing the initiative and flexibility of the artificial adjustment of the monetary aggregate, in the face of various temptations, but also bring hidden risks and risks of currency out of control. Therefore, under the credit monetary system, a strict and scientific monetary management system must be established and improved.

First, it is necessary to establish a national unified currency issuance and management system.

Under the credit currency system, the most fundamental amount of money in a country is not that the government provides credit guarantees for its fiscal revenue (this is only the performance of the government issuing securities), nor is it simply a guarantee of the bank’s own credit to issue the currency, but Within the sovereignty of the country, social wealth protected by law can be used as a corresponding. Therefore, the credit currency is no longer a commodity in kind, but a trustworthy value scale protected by national sovereignty and law, so it is also called “sovereign currency” or “legal currency”. . Under the credit currency system, a country's currency must have a unified standard and a total amount control system, which is uniformly issued by the central bank or issued by a professional institution designated by the central bank under the unified supervision and authorization. Under the credit monetary system, it is necessary to implement "currency non-stateization" and lack of uniform rules and regulations across the country. It is against the law and difficult to implement!

Second, under the credit currency system, the form of currency and the way of liquidation have changed profoundly.

Under the metal currency system, the money collection and payment is basically cash settlement, that is, “paying the money in one hand, delivering the goods in one hand, and clearing the money and goods”. Even if there is a loan, it is mainly direct financing. Once the money (currency) is lent, As far as the transfer is made to the borrower, the lender will no longer have this part of the money, so direct financing will not create or derive a new currency.

However, under the credit currency system, people are increasingly inclined to deposit cash (banknotes and auxiliary coins) in their hands to clearing institutions such as banks, which not only reduces the troubles and risks that may be caused by holding large amounts of cash in their hands, but also may obtain The interest paid by the deposit institution and other income. When the transaction occurs, more and more funds are transferred through the bank, that is, the bank deducts the deposit amount of the payer's account, and accordingly increases the deposit amount of the payee's account, thus greatly reducing the cash printing. Costs in escrow, verification, custody and destruction, improve the efficiency of fund liquidation, and strengthen the regulation of fund circulation compliance.

As a result, the liquidation of money receipts and payments is increasingly converted from cash to accounting, and the performance of money is increasingly converted from cash-based tangible currencies to deposit-type intangible currencies (electronic currencies). , digital currency, etc.); the total amount of money is no longer just cash in circulation, but the conversion of “cash in circulation (M0) + bank deposits”, the non-cash or digitization of money is becoming more and more obvious.

Thirdly, the way in which money is put in, is printed and placed exclusively by the central bank, converted into the base currency for the central bank to purchase monetary reserves, and indirectly financed by the bank loans.

People are putting more and more cash in their hands, which is conducive to banks to concentrate the idle monetary resources of the society, and distribute them to places that the society needs by issuing loans and buying bonds, thus improving the efficiency of capital utilization and better. Promote economic and social development.

However, bank loans or the purchase of bonds are things that the bank decides on its own. There is no connection with the depositors. It will not reduce the original deposits because the banks issue loans. Instead, they will generate new deposits (currency) because of bank loans, and the results and deposits. There are major differences in how people directly transfer funds to borrowers. In order to distinguish between two different financing methods, the financing directly by the fund supply and demand sides is called “direct financing”, and the fund owner deposits the funds in the intermediary institutions such as banks, and the intermediary institutions independently provide the funds to the demand side for financing. It is called "indirect financing." Direct financing itself does not derive currency, and indirect financing will generate new currency.

After the emergence of indirect financing, the release of money has expanded into new ways or channels: not only the central bank through the purchase of currency reserves, such as gold, silver or other liquid strategic materials, but also foreign exchange (international hard currency) Currency, and there are indirect financing derived from bank loans.

The central bank's purchase of currency reserves to put money, not only allows the money to be released to have a corresponding value support, but also an important basis for determining the currency value. This is the most basic way of money delivery, so this part of the currency is also known as the “base currency”.

However, the central bank's purchase of currency reserves cannot be expanded indefinitely, but should be controlled as much as possible. Otherwise, the monetary system will return to the physical currency or metal standard of the commodity, and it is difficult to effectively regulate the total amount of money.

In this way, indirect financing of derivative currency has become an increasingly important channel for credit money to be placed. Its proportion in the total amount of money is increasing, and the size of social wealth should be measured through the demand for funds of society. The currency makes the total amount of money and the scale of wealth correspond to each other.

Of course, the currency that is delivered through indirect financing is largely an estimate of social wealth, and there may be deviations: if the borrower fails to repay the debts such as bank loans, and thus form the bank’s The loss of bad debts will cause the currency originally derived through indirect financing to form a deficit, and there is no real wealth to correspond. If this situation accumulates to a certain extent, it will cause a significant depreciation of the currency. Once it affects the society's confidence in the currency, or raises people's concerns about the greater depreciation of the currency, it may trigger a currency crisis or financial turmoil, and even cause serious social problems. .

This also spawns a question that must be highly vigilant: the bank issues loans, which belong to the bank's own assets, so it can collect loan interest and realize operating income, but the loan-converted deposit belongs to the national legal currency and is guaranteed by the state's wealth. This causes the bank to lose the balance between the income and the cost of the loan. It is easy to induce the bank to issue more loans and ignore the quality control of the loan, which ultimately affects the credit of the currency.

Therefore, it is important to strengthen the quality management of indirect financing. This includes at least: First, there must be strict and clear quality certification standards, which can accurately and timely reflect the quality of indirect financing, including strict control of the loan-to-investment, to invest in the vicious circle of investment; second, the possible financing losses, It is necessary to make provision for losses and write-offs in a timely manner; the third is to have strict management rules for indirect financing suppliers (such as banks), such as establishing clear capital adequacy ratio, liquidity ratio, asset non-performing rate, provision coverage ratio, etc. Regulatory indicators, according to the actual level of control of their indirect financing capabilities, etc., if they do not meet the requirements, they must be cleared in a timely manner; if the assets are insolvent, it is necessary to implement bankruptcy liquidation and eliminate the hidden dangers of large currency deficits.

Finally, under the credit monetary system, it is necessary to distinguish between central banks and commercial banks, and strictly control the central bank to provide financing directly to the society.

The central bank is given special rights for money distribution and supervision. If it is allowed to provide loans directly to the society, purchase bonds, etc., if the financing is problematic, the central bank can cover up the problem by expanding the money supply. The central bank’s lack of financial constraints cannot be liquidated and the total amount of money is out of control. Therefore, it is necessary to strictly control the central bank's financing activities such as providing loans and buying bonds directly to the society, and making it more focused on the supervision of social financing and monetary aggregates. The central bank can only purchase qualified second-hand bond products in the interbank market or provide the necessary refinancing to release the necessary liquidity to the interbank market.

Indirect financing for the society should be handled by commercial banks and other institutions, and subject to strict supervision by the central bank and other regulatory agencies, strengthen the financial constraints of commercial financial institutions, and allow commercial financial institutions to be liquidated, the government and the central bank do not We should blindly pursue short-term financial stability and provide excessive support for commercial financial institutions to rigidly redeem, making it a stealth central bank, accumulating greater financial risks, and undermining the monetary system and financial order.

Among them, in order to avoid administrative intervention of government financing, in general, the government may not directly lend to the bank, or issue bonds directly to the bank, but only issue bonds to the public.

three

At this point, what is the truth of the currency? What is the watershed between good finance and bad finance? You may wish to return to the source and understand the nature of money and the logic of finance.

Money is generated and continuously developed in response to the needs of exchange transactions, which in turn has a positive effect on the development of exchange transactions.

After thousands of years of history, the monetary performance and mode of operation have been continuously sublimated, with a view to improving operational efficiency, reducing operating costs, and closely monitoring risks, making better use of the positive functions of money and restraining its possible harm.

Despite the constant changes in the form and mode of operation of the currency, the nature and core functions of money have always been the "value scale" and "exchange medium". This is the core thread for observing and grasping the changes in currency development. Basic logic. Breaking away from the basic background of exchange transactions, as well as the core line of value scales and exchange media, focusing on some of the branches, trying to use some rare events to be partial and complete, and commit to the origin of currency, new currency, etc. It is a test of history.

On the basis of money, it has evolved a unique financial activity, that is, using money as a carrier, proof of value (printing and distribution of money), transfer of value (payment and settlement of money), and voting of money according to agreed conditions. Financing (currency is given special rights and obligations, converted into funds or capital, and begins to separate from the real economy for independent investment and financing, including equity financing, debt financing, structured financing or convertible financing, and other financial instruments and products), finance The trading of products, the institutions and places of financial activities, the financial supervision system, etc., the tools and methods of financial activities are becoming more and more complex, and the influence is getting more and more profound.

Through financial activities, social wealth can be transferred and optimally allocated, social idle resources can be fully activated and better allocated to where they are needed, resource utilization efficiency can be improved (less idle and waste), and more social wealth or value can be created. Reasonably disperse or share risks and promote better economic and social development. Financial activities can obtain a reasonable share of the expected increase in social wealth as their own return, which is the rationality and foundation of financial existence and development.

However, since a large amount of wealth transfer in financial activities is based on future expectations or forecasts of both parties to the transaction, there is uncertainty, that is, risk, and there may be errors in the allocation of resources due to incorrect expectations, not only failing to create Expected added value, and may cause losses to the original wealth. Therefore, whether it can effectively identify and control risks becomes the core standard for the professional quality of financial practitioners or financial institutions, and becomes a watershed between good finance and bad finance.

The development of monetary finance makes the physical transfer of social wealth and its value transfer, the use right and ownership are separated, the value and ownership of social wealth can be run independently from the physical and use rights, and the transfer of value and the allocation of resources can be realized more flexibly. As a result, financial activities are increasingly separated from the real economy, moving towards independence and specialization. Financial transactions are more active and frequent than actual investment trade. Finance has become a “virtual economy” corresponding to the “real economy” and has become a modern economy. The core of the blood and resource configuration.

However, no matter how developed the monetary finance is, it is still rooted in the real economy and finally in the real economy. It is above the real economy and cannot be completely separated from the real economy. Completely out of the real economy, money and finance will become a bubble, and will be destroyed at any time. Therefore, the development of service entity economy is the origin and purpose of finance, and the relationship between monetary finance and the real economy must be handled well.

four

Finally, imagine what the future currency looks like… After scanning “legal currency and business circle tokens, tangible currencies and digital currencies”, what conclusions might we get?

It must be noted that under the existing legal currency, it does not mean that the tokens that are not used within a certain range are given special rights and obligations. For example, in China, the legal currency is the renminbi, but many units of the canteen issue and use their own food tickets or cards, many malls issue and use their own vouchers or cards, many e-commerce platforms issue and use their own points or tokens, It is given a special offer, and if it is allowed to purchase directly in RMB, additional proof of identity is required and the efficiency and cost of verification is even worse. Therefore, this kind of business circle currency or community currency used within a certain range has its existence value, and the country generally does not strictly prohibit it.

However, as a business circle currency, it must be controlled within the set range, and it cannot be used freely out of the control range. Otherwise, it will have an impact on the management of legal currency. Therefore, it must be strictly regulated by the monetary authorities.

The business circle currency can be directly bound to a legal currency 1:1 exchange to produce a tangible physical token, or a special algorithm can be used to generate an invisible network digital token from a computer system. Internet digital tokens can be directly bound to a legal tender to realize their exchange with other legal tenders, or they can be not bound to any legal currency, and are completely exchanged by an independent exchange market and legal tender, which is related to legal tender. Price, determined by the market, free floating.

With the development of the Internet, on the basis of the real world under the Internet, a relatively independent online network platform-type community has been developed, and a relatively independent network world has been formed. The operating scope of some network platforms has broken through the offline judicial administrative boundaries, forming a network platform for transnational operations. In actual operation, it will inevitably encounter problems such as identity verification of parties to economic activities, verification and exchange of currency. Since different countries have different identity information and different currencies, if each transaction needs to verify the legal identity information of the parties and exchange different currencies, the cost, efficiency and risk will be unbearable. Therefore, it is completely possible to consider establishing a conformity. Based on the regulatory identity information of the participants, the network platform re-assigns a unique identity code on each participant's platform and corresponds to the legal identity information. At the same time, it can run the only dedicated currency on the platform and allow participants to exchange platform currency and legal currency through an external independent currency trading platform (the platform is not directly engaged in redemption, but also based on the consideration of avoiding exchange rate risk).

After the outbreak of the subprime mortgage crisis and the comprehensive financial crisis in the United States, some people introduced pre-set total and phased incremental rules in early January 2009, which were completely controlled by the system to prevent human intervention, and “decentralized” Network "crypto currency" – bitcoin. Subsequently, this kind of network “cryptocurrency”, which pursues fair and equitable money supply, peer-to-peer payment, mutual verification and record of participants, and prevents human intervention or fraud as the core idea, has gradually emerged, which has spawned Ethereum, Litecoin, etc. The more and thousands of network “cryptocurrencies” have had a major impact on the concept of money and the monetary system, and many people are full of expectations and imagination.

But in fact, Bitcoin is entirely a virtual currency that is generated and operated in a human-designed, fully enclosed network system. Although its system design uses complex blockchain and encryption technology, it is based on the design principle of money. Highly imitating gold: The reserves of gold in the earth are certain, and the more intuitive it is, the easier it is to dig out. The more new production is added later (of course, this ignores the increase in productivity), and one day it will be dug out. Therefore, Bitcoin also determines a total of 21 million according to mathematical algorithms and set rules, and generates a new batch of bitcoins by computer operation (mining) every ten minutes or so, every ten minutes in the first 4 years. The output is 25, and the new output is automatically halved every four years. It is expected that it will all end in 2140.

Since gold used to be the most common and influential currency in the world, gold still has important value-preserving functions until today. Therefore, bitcoin is designed according to the mechanism of gold, and it is very easy to accept that it can be used as currency (digital gold). . At the same time, its total set-up, the design of halving the output every four years, also gives people a strong expectation of currency appreciation, which enhances its appeal to people.

However, Bitcoin completely contradicts the design of gold itself, but it completely contradicts the logic of currency development :

1. The method of setting the total amount and the staged output in advance makes it difficult to supply the total amount of Bitcoin with the scale of social wealth that may be valued by Bitcoin. Therefore, it is difficult to maintain the basic stability of the currency and play the currency. The basic function as a measure of value.

2. As a currency, it is necessary to have a certain scope, and the social wealth protected by law corresponds to it. Bitcoin is a product of a network system. There is no legally protected social wealth corresponding to it. It is limited to its own network system, and bitcoin is completely nothing.

Some people think that the bitcoin system itself is equivalent to a central bank issuing bank and central clearing system. As long as people are willing to accept bitcoin, the world's wealth can be matched with bitcoin, and various exchange transactions can be cleared with bitcoin. .

However, such a result would pose a threat to the legal currency of each country. If the legal currency is allowed to be circulated and the network cryptocurrency is allowed to flow, then the stability of the legal currency's currency value is difficult to guarantee. Under the circumstance that the country will still be difficult to eliminate for a long time, it is unrealistic to subvert national sovereignty and legal currency. The state will strictly restrict the circulation of network cryptocurrency in the country.

At the same time, because Bitcoin is a decentralized network cryptocurrency, there is no geographical or legal restriction. If Bitcoin can be circulated, it will generate countless network cryptocurrencies such as Ethereum and Litecoin. The result will destroy them. As the basis of money.

3. One of the features that the Bitcoin system is particularly advertised is the decentralized, peer-to-peer payment, which is believed to greatly increase efficiency, reduce costs, and form a “value Internet.” But in fact, to do this, the conditions are extremely strict, that is, all participants must register on the Bitcoin platform; only one bitcoin can be received and received, and there can be no other assets; Blockchain technology can ensure that the amount of Bitcoin in each account is real, verifiable, and difficult to falsify. Bitcoin can be transferred between different accounts, and you can know who the account owner is and realize peer-to-peer direct execution. Get verification and record of each node in the whole network.

This result makes the Bitcoin platform a completely closed network system, which is difficult to solve the problems of real-world exchange transactions, such as the identification of rights, contract execution, and dispute handling. Moreover, since there is no consensus and standards yet, cross-chain transactions are difficult to deal with, and it is even more impossible to do peer-to-peer processing.

Therefore, Bitcoin is a kind of decentralized (no legal protection), and the online currency that sets the total amount and the staged output in advance, even though it is named "Coin" or "Currency", it can only be a kind of Network virtual assets – Bitcoin system is actually a kind of online game. Bitcoin is a special kind of "game currency". Its price also needs to be determined by currency. The price change is completely subject to its own supply and demand relationship. It is easy to get up and down, and it is difficult to maintain the basic stability of the currency.

In the ten-year period of Bitcoin, it has experienced many rounds of price fluctuations. It has also made many people who are superstitious and can replace or subvert the legal currency to realize that Bitcoin, a type of network cryptocurrency, is actually hard to become. Real currency. As a result, some people began to introduce a 1:1 fixed link with a legal tender, with a legal currency as a support for the network token. This actually returns to the essence of the business circle token.

It can be seen that the network cryptocurrency can still only be the network business circle currency or the community currency, which is difficult to replace or subvert the national legal currency; the value of the network business circle currency depends on the actual application value of the network platform, and there is no good platform application value, mainly relying on Hype "coin" is not vital; network cryptocurrency can be exchanged with legal currency, but redemption must meet the requirements of regulatory anti-money laundering, anti-terrorism delivery, etc., after the legal currency is converted into network cryptocurrency, only the original name, The original currency, the original account in and out, this should become a new important area of ​​legal currency regulation; the legal digital currency dominated by the central bank, it is impossible to imitate the decentralized network cryptocurrency design such as Bitcoin, only the digitization of legal currency; The tangible cash turns to the invisible digital currency, which is the inevitable direction of currency development. It is necessary to use advanced technology to actively promote the de-cash and digitization of money.

However, no matter what changes in the form and mode of operation of the currency, its essential attributes as a measure of value and the basic functions of the exchange medium will not change. The core requirement for keeping the currency's currency value basically stable cannot be changed – this is the true phase of money!

The author of this article is Wang Yongli, the former vice president of the Bank of China, and published in the Economic Observer Online.