On June 18, 2019, Facebook published a white paper on stable coins. One stone has stirred up thousands of waves. This move has sparked heated debates from all over the world. From government bureaucracies to street corners, there are support and opposition. Here, we will discuss the views of major European and American countries. First, the French Finance Minister said that the stable currency issued by Facebook does not have the ability to become a sovereign currency. However, Facebook has never said that this is a legal currency. Its stable currency does not have any central bank support, nor does it have any government guarantees. Unlike the stable currency issued by IBM, there is a US government guarantee. Since there is no government support, how can it have the ability to become a sovereign currency? What is the opinion that the French Minister really wants to express?
Second, the Bank of England said that Facebook's stable currency will face strict supervision and review by the G7 Group. He said very well! But why didn't he say that two weeks ago? At the time, Barclays Bank of the United Kingdom and other 13 banks were to issue stable coins, including digital pounds, digital dollars, digital yen, digital euros, and digital Canadian dollars. Why did the Bank of England not say that it would take strict supervision and review of the digital pound? Should the Bank of England also adopt the same strict G7 regulation and review of these figures in pounds, digital yen, digital dollars, and digital euros?
Finally, the European Data Protection Supervisor believes that Facebook may reveal the privacy of users, which is worrying. What he said is very reasonable, but this problem is not only in Facebook stable currency, other digital stable coins, but also all stocks, cash, credit cards have the same problem, it is also worrying. Why did he make these views at this time?
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All of the above are attitudes towards the Facebook stable currency that do not appreciate or even hostile. Next, let's take a look at other points.
The Federal Deposit Insurance Corporation (FDIC) expressed concern about what to do with Facebook's stable currency, and thought the explanation on Facebook's white paper was a bit vague. In fact, it is ambiguous, but there is no mention of use at all! Every individual's consumption behavior is private, including the use of Facebook's stable currency. Why does the FDIC want to make such a point of view? Read it carefully and you will understand that they only need to supervise the use of stable currency. What does this mean? This means that the FDIC believes that Facebook's stable currency is money, and spending money (stable currency) needs to be regulated. In fact, this is the FDIC's positive response to Facebook's stable currency! Representing the US government in supporting Facebook to issue stable currency. I don't know if you can see it?
The Fed chairman said that he has high expectations for Facebook's stable currency in terms of safety, stability and supervision. He acknowledged that Facebook has already contacted them to discuss various regulatory issues. What does this mean? This means that the US central bank also supports Facebook's stable currency.
Facebook should have been expected for this, so they are very smart, obviously American products, but registered the company in Switzerland, so Facebook stable currency is actually Swiss, and Switzerland is very friendly towards digital currency. Also because it is Swiss, some European countries have great opinions on Facebook's stable currency. It is an American company, but enjoys the EU's preferential treatment. Therefore, in the legal sense, Facebook stable currency belongs to the European Union. The EU is legally allowed, but emotionally, it does not like this project that changes the entire financial market and may have a huge impact on their national economy.
Discussions on Facebook regulation will continue for some time. We feel that the attitudes of various countries have become very clear. Basically, other countries are attacking. The United States seems to be attacking. In fact, it is strongly supportive and helps Facebook to promote this matter. This is also what the author said two days ago. These stable coins cannot and will not replace the legal currency. Instead, they will become a tool for legal currency and help promote the legal currency. Facebook's stable currency must support the US dollar, and it is also an aid to the US dollar. Since it is a tool of the US dollar, the US government and the central bank will certainly support it.
Moreover, behind these debates, there is a secret secret, and new currency competition has arrived! This is the first time in human history that currency competition related to digital currency, and this time, unlike Bitcoin, the digital currency here is not against the French currency, but as an assistant to the French currency. The US government and the central bank slammed Facebook's stable currency, identified it as valuable, emphasized regulatoryity, and had high expectations (they certainly did not forget that they have always believed that other digital currencies have no value and should be self-defeating in the market); European countries have been criticizing their security and privacy, and have emphasized the need to review their systems in the most rigorous way (these countries have forgotten these words when their banks issued stable coins two weeks ago).
Some people may think that this is "only" a US company issuing stable currency, not a legal currency, and the company cannot operate in China, so Facebook's stable currency is "not important." Is that true? Now that both the US government and the central bank have begun to lie, the European Central Bank and the government have also begun to publicly attack. This is already a state-level public debate. Difficult, this will be "not important"?
The protagonist of this currency competition is "French currency + auxiliary stable currency", and the two fight side by side, not only the legal currency. In the "blockchain application landing is not a wolf but a tiger came"  mentioned five tigers in the article:
Three of the tigers are pure "dollar tigers" with only a few dollars; the other two tigers have other digital currency [1, 2, 4] in addition to the digital dollar. The hegemonic logic of the US dollar is as follows: The US dollar is the boss, with 5 digits of dollars "little brother", the digital dollar is open for the dollar, who wants to find the dollar trouble, first pass the digital dollar and then say!
Among them, 14 banks in 6 countries jointly issued 5 stable coins, including digital dollars, euros, pounds, yen, and Canadian dollars. How is this scene so familiar? Like the "New Eight-Power Allied Forces" that do not compete like money?
Some people think that digital currency is just digital cash. However, as early as 2016, the Bank of England stated that the digital currency is a tool for national monetary policy and a weapon for national sovereignty and regulatory power [7, 8, 9]. The Bank of England also reported that the use of digital currency can increase the country's GDP. The Bank of England also has an innovative idea that a country's legal currency can come in two forms, and it can have different monetary policies, which is more flexible than the previous one and a monetary policy. These views are also strongly endorsed by the Bank of Canada. The Central Bank of Canada is the world's first central bank to issue a blockchain experiment report and is also a member of the "New Eight-Power Allied Forces".
This currency competition has actually begun to brew in 2016. When the Bank of England discussed digital legal currency [5,10], the Bank of Canada and the European Central Bank were actively involved. The Bank of Canada’s 2017 experimental report is now a block. The classic of chain research . In 2018, the US Congress met. After the meeting, the series of actions in the United States was obviously a well-deployed state-level operation. The author used the 3 points to explain. Then in July 2018, the tiger finally arrived!
Figure 1: One person with 5 dogs, it seems that the French currency has 5 stable coins, and the power is much stronger.
In the past, currency competition was the benefit of countries through the use of legal currency. The usual practice was to obtain benefits by devaluing the legal currency to stimulate exports. When countries begin to competitively depreciate their domestic currency, global currency wars and exchange rate wars will break out. This is old-style currency competition.
The new currency competition can also use stable currency to enter other countries' markets, and can control trading information in a timely manner. The characteristics of the new currency competition are: fast circulation, 24X7, no SWIFT, but can be regulated by the national blockchain. On the one hand, stable currency can stimulate the economy and protect property through interest (positive or negative interest). In the economic crisis, funds will flow to digital legal currency or a stable stable currency; on the other hand, without interest, you can also use stable currency, for example. Big buy or sell stable coins affect economic activities. For example, if a country uses certain stable coins, other legal or stable coins will be suppressed.
Devin, a very sensitive blockchain application practitioner in the market, has an interesting comment on the “5 digital tigers”. “Digital finance is like a hot weapon gun in the past. It’s already stunned by the soldiers, and it’s sticking to the big knife and the spear. And the bow and arrow cold weapons, we do not know the wheel of the digital economic history is rolling!"
In the new currency competition, the abandonment of blockchain technology is like the use of old weapons such as large knives, spears and bows and arrows, and the abandonment of new weapons such as guns and tanks. Blockchain technology is a new type of weapon that can be used, which is more convenient for supervision and control than SWIFT .
The new digital currency and the traditional legal currency exist in a competitive and integrated situation. Most stable currencies are based on legal currency and do not replace any party. Technology, especially blockchain technology, plays a big role in this competition and convergence, because blockchain technology can account for legal currency, generate and manage new currency, and support both transactions.
The new currency competition has arrived. Do you understand? Who will become the real winner in this new currency competition? How should each country react to the "New Eight-Power Allied Forces"? Who will win this new currency competition? let us wait and see.
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 Cai Weide, Jiang Xiaofang, “The rise of the blockchain industry, this time is true, but is there any regulatory preparation? (Bottom) | DeepHash column”
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Ph.D. student of Beihang University of Computer Science, Chartered Financial Analyst (CFA), member of Beijing Financial Analyst Association