China News Service Client, Beijing, May 3 (Reporter Li Jinlei) Recently, with the exposure of an internal test image of a digital currency wallet, the central bank digital currency that has been studied since 2014 has finally unveiled a mysterious corner.
Digital currency data chart. Image source: Visual China
Digital currency open beta
The Digital Currency Research Institute of the People's Bank of China recently revealed that the current digital RMB system (DC / EP) information is the test content in the process of technology research and development, but it does not mean that the digital RMB is officially issued. At this stage, internal closed pilot tests will be conducted in Shenzhen, Suzhou, Xiong'an, Chengdu and the future Winter Olympics scene.
According to media reports, starting in May, 50% of the transportation subsidy of some of the district government agencies and enterprises and institutions in Xiangcheng District of Suzhou City will be issued in the form of digital currency.
Digital currency has opened a closed beta, everyone's curiosity has been aroused, and a series of questions have also followed: What is digital currency? what is the benefit? How to use it? Will it completely replace paper money? Will it replace Alipay and WeChat Pay? Will it overshoot and cause inflation?
What is digital currency?
Simply put, the central bank digital currency is a digital alternative to paper money. It has an English name: DC / EP (Digital Currency Electronic Payment), that is, digital currency and electronic payment tools.
"The functions and attributes of digital currencies are exactly the same as banknotes, except that its form is digital." Mu Changchun, director of the Central Bank's Digital Currency Research Institute, said.
The central bank governor Yi Gang said at a press conference in 2019 that in the future, the goal of China's digital currency and electronic payment is to replace part of M0 (cash in circulation), not to replace the narrow currency M1 (cash in circulation + corporate demand deposits) Or broad currency M2 (cash in circulation + corporate demand deposits + time deposits + resident savings deposits + other deposits).
Zhao Xijun, deputy dean of the School of Finance and Economics of Renmin University of China, told reporters from China News that digital currency can be circulated like paper money, and its positioning is to replace cash, which is legal currency like cash. No one can refuse to accept.
Data map: Citizens pass by the People's Bank of China. China News Agency reporter Zhang Xinglong photo
How much is the digital currency?
Mu Changchun once described such a usage scenario: as long as you and I have a DC / EP digital wallet on your mobile phone, you do n’t even need the Internet. As long as the mobile phone has electricity, you can put one person in the digital wallet by touching it The digital currency is transferred to another person.
Moreover, when paying, there is no need to bind any bank account. Unlike the use of WeChat or Alipay, a bank card is required, but DC / EP is not required.
Mu Changchun said that unless you want to charge money to the digital wallet, or you want to withdraw money from the digital wallet to manage money, in addition, the mutual transfer between users does not require account binding. This means that DC / EP can circulate like paper money.
Dong Ximiao, the chief researcher of Xinwang Bank, told reporters from ChinaNews that digital currency can realize "dual offline payment", both the revenue and expenditure are offline, and payment can also be made. As long as the phone has power, even if the entire network is down, payment can be achieved. This is indeed more advantageous than WeChat Pay and Alipay.
In addition, digital currency can achieve controllable anonymity, which means that it can meet the needs of anonymous payment. As long as you do n’t commit a crime, you can use it for spending that you do n’t want others to know. Alipay and WeChat payment are tightly bound to the traditional bank account system, and are all real-name payments, which cannot meet the demand for anonymity.
How to use it?
It is understood that the digital currency adopts the same "double-layer operation" delivery method as cash notes-the People's Bank of China to commercial banks, commercial banks or commercial institutions to the public. It will not issue digital currency directly to the public.
Yi Gang once explained, "The future framework of our digital currency is the two-tier operation system of the central bank and commercial banks, without changing the current currency delivery path and system, thus fully mobilizing the enthusiasm of the market.
Mu Changchun pointed out that the exchange of digital currencies will still maintain this structure: commercial banks open accounts in the central bank, pay 100% of the reserve, and individuals and enterprises open digital wallets through commercial banks or commercial institutions.
So for users, you do n’t actually need to go to a commercial bank. Just download an app, register, and the wallet can be used. For example, if you want to receive payment from another person. If you want to exchange digital currency, just use your The bank card can be exchanged.
Digital currency data chart. Image source: Visual China.
Will it completely replace paper money?
Mu Changchun introduced that the central bank's digital currency DC / EP should start with M0, that is, to replace the banknotes and coins in circulation with digital currency, not to replace all RMB. The balance in the account of a commercial bank actually exists in digital form, and there is no need to replace it.
Dong Ximiao believes that digital currency cannot completely replace cash. At least for now, there are some technical limitations. In addition, due to different user habits, not everyone is accustomed to this payment method. For example, some older people may not accept digital currency. But if the digital currency is officially launched, for banks or merchants, it cannot be denied to users.
Zhao Xijun said that digital currency is facing two constraints to replace paper currency. Whether a user is willing to use it, and second, whether the technical conditions can be met, because the speed of transaction payment is subject to technology. When the number of transactions exceeds a certain limit, it may cause failures and downtime. 3. The software crashes.
Will it impact Alipay and WeChat Pay?
"Pay with Alipay or WeChat?"
"I use digital currency!"
This kind of scenario may become a reality in the future.
Dong Ximiao pointed out that the central bank's digital currency is the legal currency, and WeChat Pay and Alipay are only one payment method. The effectiveness of digital currency is not comparable to WeChat Pay and Alipay. From the user's perspective, the central bank's digital currency is used in a wider range, has unlimited legal compensation, and is mandatory, but other payment methods do not have this function.
"Specifically, institutions or individuals do not accept Alipay or WeChat payment, there is no legal problem. But it is illegal to refuse users to pay in cash or digital currency." Dong Ximiao pointed out that there may be a possibility that the use of central bank digital currency More and more people, fewer and fewer people use Alipay and WeChat payment.
Zhao Xijun said that after the introduction of digital currency, due to its offline payment, higher security, wider use, and no need to bind bank accounts to achieve controllable anonymity, it is expected that the scale of use of both parties may change.
Will it cause inflation?
Is the cost of digital currency issuance lower? Will over-issue cause inflation?
Xu Yuan, a senior researcher at the Peking University Digital Finance Research Center, believes that digital currency and paper currency are exchanged one-to-one. Now commercial banks must exchange their previous currency for digital currency without increasing the total amount. This is the first step. , The pilot project does not increase the total amount.
The central bank said that considering that the previous digital currency was limited to pilot projects, it will not be issued in large quantities and fully promoted in the short term, and the currency circulation rate will also remain at a normal level.
Are you looking forward to digital currency? (Finish)