How far is the fiat digital currency from us

Du Xiao, a full-media reporter from the Legal Daily, and Deng Qingyue, an intern

Source: Legal Daily

● Fiat digital currency is an extension and performance of fiat currency in the digital world. It is a new form of currency and can exist independently of bank accounts.

● If there is a concept of issuing digital currency, it is necessary to define the behavior of making counterfeit currency from the perspective of the subject. For example, regulations that require entities other than the People's Bank of China to make digital currency electronic data constitute counterfeit digital currencies, and tampering with digital currency electronic data produced and issued by the People's Bank of China constitutes digital currency alteration.

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● Digital currencies are still in the research and exploration stage. Various basic preparations, payment system technologies, and international regulatory coordination mechanisms, etc., still need to be continuously experimented.

Recently, the People ’s Bank of China issued the “Announcement on the Issuance or Promotion of Legal Digital Currency in the Name of the People ’s Bank of China”, stating that “The People ’s Bank of China has not issued any legal digital currency (DC / EP), nor authorized any asset trading platform to conduct transactions. People Banks have started researching fiat digital currencies since 2014 and are still in the process of research and testing. Both 'DC / EP' or 'DCEP' are traded on the market as illegal digital currencies, and the launch date of fiat digital currencies on the Internet are inaccurate information. " "At present, the so-called legal digital currency issuance on the Internet, and the acts of individual institutions using the name of the People's Bank to launch 'DC / EP' or 'DCEP' to conduct transactions on asset trading platforms may involve fraud and pyramid schemes. The general public is requested to raise their awareness of risks. , Do not be partial to credulity, and prevent damage to your interests. "

This is not the first time the central bank has clarified rumors related to digital currencies.

In early November, there were online rumors that the central bank's digital currency working group met with the heads of relevant blockchain companies in Shanghai. These companies are likely to participate in the first batch of data on the central bank's digital currency. The central bank denied this rumor.

With the development of socio-economic, science and technology, digital currency is receiving more and more attention, which also brings people a lot of imagination. In response, a reporter from the Legal Daily interviewed relevant experts in the industry.

Digital currency plans ahead for cross-border payment potential

According to Liu Shaojun, director of the Research Center for Financial Law of China University of Political Science and Law, fiat digital currency is an extension and manifestation of fiat currency in the digital world. It is a new form of currency that does not depend on the existence of bank accounts.

"Payment in fiat digital currency can be done without the Internet. Perhaps two mobile phones can complete a transaction with one touch."

In Liu Shaojun's view, mobile payment such as WeChat Pay and Alipay can be regarded as the "electronicization" of currency at best. When using these payment tools, people cannot be separated from bank accounts, which is essentially a kind of legal currency. Digital use.

Regarding the storage of legal digital currency, Liu Shaojun said:

"Unlike the existing regular or current savings, under the digital currency circulation system, the legal nature of the currency in the account is the legal digital currency of the central bank, which represents the credit of the central bank or the state. If a commercial bank or a payment institution Bankruptcy, these monetary funds will not become bankruptcy assets, and will only become bankruptcy assets under the conditions of bankruptcy of the central bank or national credit. But at the same time, due to the nature of its fiat currency, it will not obtain interest income, the fiat currency itself It has no value-added attributes. "

Professor Deng Jianpeng of the Law School of the Central University of Finance and Economics believes that the issuance of legal digital currencies not only facilitates payment to a certain extent and promotes national economic growth, but also improves circulation efficiency and saves circulation costs. The issuance of legal digital currency is basically free of printing, issuance and circulation costs for the country, and there is no problem of the cost of sending money.

Yin Zhentao, deputy director of the Law and Finance Research Office of the Institute of Finance of the Chinese Academy of Social Sciences, believes that legal digital currency can greatly reduce the costs incurred in the use of banknotes. At present, with the improvement of the counterfeiting technology for physical currencies, the identification and anti-counterfeiting technology also needs to be continuously improved, and the funds invested in this area are relatively large. Fiat digital currency can reduce such costs, and the traceability of fiat digital currency can also guarantee the security of people's transaction funds to a certain extent.

Yi Gang, the governor of the People ’s Bank of China, said at a series of press conferences held to celebrate the 70th anniversary of the founding of the People ’s Republic of China. In the future, the goal of digital currency and electronic payment is to replace part of M0, that is, to replace part of cash, not to replace narrow currency. M1 or broad money M2.

"We do n’t have a timetable now, and I think there will be a series of research, testing, pilots, assessments and risk prevention, especially if digital currencies are used across borders, there will also be anti-money laundering, anti-terrorist financing, anti-tax havens and 'know Your customers' and so on, a series of regulatory requirements. "Yi Gang said.

Liu Shaojun believes that legal digital currency also has great potential in the field of cross-border payment, and its point-to-point transmission mode can effectively improve the current time-consuming and high-cost problems of cross-border payment. Prohibiting the circulation of foreign currencies in the country is a universally implemented financial management rule. If foreign currencies are allowed to circulate on the domestic market, it will cause chaos in the international economic order. However, for fiat digital currencies, due to their own characteristics, many links can be reduced after going abroad. Through the exchange of currency agreements between the two countries or in the course of economic and trade exchanges and project financing, the two central banks or banking financial institutions can build each other. The agent distribution library and business library can be circulated in the markets of both parties through technical means.

"For overseas payments and overseas payments, the use of legal digital currency is more convenient for both the country and individuals. Of course, this convenience is based on special merchants, as long as it is agreed to accept RMB, legal Digital currency countries and regions can complete cross-border payments. "Deng Jianpeng said.

Laws and regulations for the orderly operation of the two-tier system need to be detailed

Yi Gang said, "The future framework of our digital currency is a two-tier operating system of the central bank and commercial banks. We will not change the current currency placement path and system, which will fully motivate the market." "We will adhere to centralized management, There is no preset technical route in research and development, and fair competition can be selected in the market. Blockchain technology can be considered, and new technologies that have evolved based on existing electronic payments can be adopted to fully mobilize the market's enthusiasm and Creative, we have also established a mechanism compatible with the incentives of market institutions. "

Deng Jianpeng believes that although this two-tier operation system can not only use existing resources to mobilize the enthusiasm of commercial banks, but also smoothly improve the acceptance of digital currency among the general public, relevant laws and regulations need to carry out the obligations and responsibilities of both parties. More clear regulations make it possible for the two-tier operating system to operate in an orderly manner.

Liu Shaojun believes that in order to ensure the issuance and circulation of legal digital currency, digital currency needs to be included in the scope of RMB.

According to Article 2 of the Regulations of the People's Republic of China on the Administration of the Renminbi, Renminbi refers to currencies issued by the People's Bank of China in accordance with law, including banknotes and coins. According to Liu Shaojun's analysis, the law does not include digital currency in the scope of RMB, nor can it provide legal regulation and protection around the issue and use of digital currency.

"From the perspective of development trends, as a type of Renminbi, legal digital currency should have the legal status of the national currency that is the same as banknotes and coins. Through the improvement of legislation, it should be clear that digital currency is a manifestation of Renminbi and the relevant definitions should be appropriate. Adjust. "Liu Shaojun said.

In addition, Deng Jianpeng also believes that at present, China's relevant regulations on counterfeit currency are difficult to apply to digital currencies. Because the definition of currency is only at the level of banknotes and coins, the currency issuance system is also designed based on the characteristics of banknotes and coins. According to the relevant provisions of the People ’s Bank of China Law and the RMB Management Regulations, first, the concepts of “forgery” and “change” are not applicable to digital currencies; second, anti-counterfeit currency work procedures are not applicable to digital currencies.

"If there is a concept of issuing digital currency, it is necessary to define the behavior of making counterfeit currency from the perspective of the subject. For example, stipulating that the conduct of making digital currency electronic data by entities other than the People's Bank of China constitutes counterfeiting digital currency, The tampering of digital data produced and issued by digital currency constitutes the transformation of digital currency. "Deng Jianpeng said.

"At the legal level, RMB is also infinitely repayable, that is, all public and private debts in the People's Republic of China are paid in RMB. No unit or individual can refuse to accept it." Liu Shaojun said.

Liu Shaojun believes that the special nature of digital currency is that its use requires the support of specific equipment. In practice, it may indeed face the problem of being unable to use digital currency due to lack of equipment cooperation, which will affect the legal authority of compensation. Regarding this issue, an exception clause should be added to the compensation clause, and it is clear that those who cannot accept digital currencies can not be accepted because they do not have objective conditions.

Liu Shaojun told the reporter of the Legal Daily that it is not advisable to force the use of either deposit electronic money or legal digital currency, because it will affect the public's right to use cash and coins. Even if a large number of legal digital currencies are issued and circulated in the future, people should not be deprived of their right to use cash and coins. This is not only a matter of living habits, but also an issue of the limitations of electronic network technology itself.

Low fiat currency credit results in poor multi-country experiments

A report released by the International Monetary Fund in July this year states that nearly 70% of central banks around the world are studying fiat digital currencies. Currently, Venezuela, Senegal and other countries have issued fiat digital currencies, and many more countries, including Canada, Sweden, and Singapore, are advancing research on fiat digital currencies.

However, the results were not satisfactory. No country in the major economy (G20) has issued a legal digital currency.

Deng Jianpeng analyzed that the issue of fiat digital currencies in some countries was not successful, mainly due to the low creditworthiness of fiat currencies. In the final analysis, the currency form is only a manifestation, and the credit behind the currency can support its circulation and use. Such responsibilities also need to be assumed by large economies. China's research on legal digital currency has been for several years, and its technical and financial strength is quite strong. Although no major country has issued a legal digital currency, the People's Bank of China is in a leading position in terms of foreign progress.

Yin Zhentao added:

"China's practice or discussion of legal digital currency, including the mass foundation and technical capabilities of legal digital currency, is at the forefront of the world."

Liu Shaojun believes that with the continuous development and maturity of electronic network technology and blockchain technology, and the change in the payment and settlement habits of the vast majority of the public, the amount of payment through the network will become larger and larger, and in most cases may not be Use cash and coins again.

Regarding the phenomenon that some countries have begun to implement a system of unsettled cash and coin circulation in an attempt to replace cash currency with digital currencies to achieve a cashless society, Deng Jianpeng believes that, at present, considering the use of mobile phones by the elderly and visual impairment, In the case of visual impairment and the use of electronic devices such as mobile phones by people with disabilities, China should not try to achieve a cashless society.

It is understood that in addition to legal digital currencies, there are some illegal digital currencies, such as stable coins represented by Libra and SDR, which are essentially tokens and withdrawal certificates of several other designated reserve currencies, which are not really meaningful. The currency, as well as the cryptocurrency represented by Bitcoin, is not a real currency.

Liu Shaojun believes that although these illegal digital currencies have their own advantages, in terms of their high risk and instability, even if they continue to develop, they will never shake the dominant position of legal digital currencies.

"Whether it is a legal digital currency or a commercial digital currency, its positive significance is worthy of recognition, but we must also clearly realize that digital currencies are still in the research and exploration stage, various basic preparations, payment system technologies, and international regulatory coordination mechanisms, etc. It still takes time to prepare and experiment. Even if the legal digital currency is issued, the initial stage must be experimental, and after the issue, the degree of public acceptance will be closely monitored. "Liu Shaojun said.

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