Chen Yuan, vice chairman of the 12th National Committee of the Chinese People's Political Consultative Conference: Libra is likely to have an impact on traditional cross-border business and payment business

Article source: Financial sector original title: "Chen Yuan: The integration of finance and technology is the trend of the times"

On July 13th, the “Fourth Global Financial Technology (Beijing) Summit” hosted by China Financial Forty Forum and Financial City was held in Beijing. The theme of this summit was “ Financial Technology: Standard Development and Efficient Empowerment ” . Chen Yuan , Chairman of the CF40 Standing Committee and Vice Chairman of the 12th National Committee of the Chinese People's Political Consultative Conference, attended the summit and delivered a speech.

Chen Yuan pointed out that recently, Facebook released a cryptocurrency plan called "Libra." Libra is different from the two main features of other cryptocurrencies. One is the ability to move freely across borders, and the other is to anchor a basket of low-volatility assets . From the current positioning, Libra will play a role in the cross-border payment field, after the future is pushed. From the perspectives of monetary policy implementation and macro-prudential management, central banks, including international organizations, need to conduct regulatory cooperation in this regard.

The following is the full text of the speech:

• Can Facebook's Libra project go smoothly? Ten governments responded
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Distinguished guests, friends, ladies and gentlemen:

Hello everyone! I am very happy to attend the 4th Global Financial Technology (Beijing) Summit. The theme of this summit is “Finance Technology: Standard Development and Efficient Empowerment”. I will talk about my own views on how to promote the development of financial technology norms.

I. The development of financial technology welcomes a new stage

In today's world, the integration of finance and technology has become the trend of the times. New technologies such as big data, cloud computing, blockchain and artificial intelligence have been used in different financial formats. Financial technology has become one of the most important factors driving the transformation and upgrading of the traditional financial industry.

The development of large-scale technology companies provides a rare opportunity for the financial industry to improve service efficiency. The correct application of financial technology can support financial product innovation, broaden financial depth, improve financial service efficiency, and thus help the real economy.

Many countries have actively explored in the field of financial technology. The development prospects and regulatory norms of financial technology have become an important issue in the world. The developed countries such as the United States, the United Kingdom, and Singapore have all issued relevant development strategies and support policies.

For example, in terms of regulatory technology, the UK first proposed a “regulatory sandbox” innovation model and created a “safe area” to stimulate the vitality of financial innovation by appropriately relaxing the regulatory constraints of innovative products and services involved in the experiment.

In the area of ​​financial technology applications, Facebook recently launched a cryptocurrency program called Libra . Libra is different from the two main features of other cryptocurrencies. One is the ability to move freely across borders, and the other is to anchor a basket of low-volatility assets. From the current positioning, Libra will play a role in the cross-border payment field. After the future, it will likely have an impact on traditional cross-border business and payment business . From the perspectives of monetary policy implementation and macro-prudential management, central banks, including international organizations, need to conduct regulatory cooperation in this regard.

China's financial technology is in a leading position. After more than ten years of development, China's financial technology industry has covered payments, credit, investment, insurance, credit reporting and other businesses, especially in the field of mobile payments, has led the world, becoming the most active global financial transactions, the most convenient payment, One of the lowest cost and most efficient countries.

According to the World Bank's assessment, China's financial technology development index ranks second in the world in 2018, second only to the United States. With the official issuance of 5G commercial licenses, the supply capacity of China's information technology industry will continue to increase, and it will give more development space for financial technology.

Second, the risks and challenges under the rapid development of financial technology

The development of financial technology has created new opportunities and brought new risks and challenges.

The first is to bring challenges to traditional financial institutions. In the face of the rapid development of the financial technology, most traditional financial institutions are not yet fully prepared.

On the one hand, at the strategic level, most traditional financial institutions lack a comprehensive financial technology development layout, which is only dealt with by a fragmented strategy. On the other hand, traditional financial institutions lack financial technology talents and corresponding corporate cultures in changing existing technologies and systems and innovating new technologies. There are already some financial institutions active, especially large financial institutions. These institutions should actively exert their advantages in human, material and financial resources and contribute to the innovation and development of financial technology.

Second, it has brought challenges to financial supervision, and the level of regulatory technology needs to be improved. On the one hand, the financial supervision system lags behind the development of financial technology, and it is difficult to match the developmental reality of financial technology. In some areas, financial regulation has problems with technology. For example, the underlying technical architecture of financial services has gradually shifted to distributed and decentralized. However, national regulatory agencies are still accustomed to solving problems under the original centralized framework and forming institutional mismatches.

On the other hand, cutting-edge technologies applied in the field of financial technology, while improving financial efficiency, also bring a series of new risks and hidden dangers, which need to be concerned and restricted at the regulatory level. For example, while providing cross-market, cross-institutional, and cross-regional financial services, financial technology will also make risks more contagious and broader. In addition, regulators need to consider how to balance regulatory efficiency and technological development to control both potential risks and innovation.

Third, support the development of financial technology norms to better serve the real economy

Faced with the rapid development of financial technology, relevant parties should actively promote their normative development under the premise of strictly controlling risks, so that finance can better serve the real economy and ultimately benefit the people's livelihood.

First, encourage traditional financial institutions to strengthen cooperation with financial technology companies. For example, the cooperation between banks and financial technology companies will help alleviate the financing problems of small and micro enterprises. With the help of new technologies such as big data and artificial intelligence, financial technology companies can help traditional financial institutions such as banks to enhance their ability to acquire customers, provide supplementary credit and post-loan management services, and greatly improve the efficiency and popularity of financial services.

The second is to encourage regulators to upgrade the level of regulatory technology. Regulatory authorities need to establish regulatory standards that are compatible with the development of the financial technology industry, constantly fill the regulatory gap, and achieve full coverage of risk supervision. For example, determine the regulatory bodies of various financial technology companies, clarify the supervisory authority; strengthen the behavior supervision according to the characteristics of financial technology development, effectively protect the interests of financial consumers and investors; continuously strengthen the supply of financial infrastructure, support the underlying of various financial services The technical structure and the construction of the credit information system ensure the sound and sustainable development of the financial system.

The third is to further promote international cooperation in the field of financial technology. It is very important to continue international dialogue around financial technology. The international cooperation formed spontaneously at the enterprise level will help the improvement of the financial technology business model in various countries; international cooperation in the regulatory field can integrate the regulatory methods of countries in the fields of data privacy protection, cross-border payment system management, digital currency, etc. A better clarification of the regulatory responsibilities of financial technology on a global scale will help countries to achieve innovative development of financial technology while controlling the corresponding risks.

In order to support the development of financial technology norms, since 2016, the China Financial Forty Forum and the Financial City have held the Global Financial Technology (Beijing) Summit every year, which has established an efficient communication platform for the regulatory authorities and relevant institutions and scholars. I hope that all of you will have some success at this year's summit. I wish this forum a complete success! thank you all.

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