(Financial World) The global digital currency boom heats up, the digital RMB accelerates the lead
China News Service, Beijing, July 6th. Title: The global digital currency boom is heating up, and the digital renminbi accelerates to lead
Author Liu Wenwen
Recently, digital currency has once again been on the cusp of the storm.
On the one hand, Spain is enthusiastic about joining the craze for creating digital currencies, while on the other, Fed officials have mixed opinions on digital currencies...
With the development and empowerment of blockchain technology, the world has set off an upsurge to create digital currencies, and many sovereign countries have accelerated the deployment of digital currencies.
What are the considerations for the deployment of digital currencies in various countries?
Will digital currency overturn the traditional monetary payment system?
Global central bank digital currency boom is heating up
In recent years, the attention of central banks and international financial organizations to digital currencies has surged.
More and more countries have expressed their views on digital currencies, and related research and development are in full swing.
Before the digital pound was issued, the UK had endorsed its platform.
Recently, Tom Mouton, director of financial technology at the Bank of England, fully affirmed the efficacy of central bank digital currency at the Future Financial Technology Conference, and believes that central bank digital currency has the advantages of security, efficiency, and controllability.
The Swiss National Bank and the Bank of France are more active and are the first to test the waters. On June 10, they stated that they would cooperate on the trial of Europe's first cross-border central bank digital currency payment service.
Not to be outdone, Spain has recently announced that it will take the express train of digital currency.
On the whole, Europe is very fond of digital currencies.
According to foreign media reports, Fabio Panetta, a member of the Executive Board of the European Central Bank, revealed on June 20 that the development of the digital euro is accelerating, and the digital euro is expected to be officially put into use in five years.
The other side of the Atlantic is also gearing up.
Although U.S. officials have mixed opinions on digital currencies, the Biden administration has shown a more active and open attitude towards U.S. central bank digital currencies this year. Fed Chairman Powell has recently announced that it will release a report on the possible creation of a digital dollar this summer. report.
It is worth noting that when other countries are still preparing for digital currencies, the People's Bank of China has taken the lead.
At present, many places in China have started digital renminbi trials, eating, shopping, riding the subway...More and more application scenarios are being explored.
According to data from the Bank for International Settlements, as of July 2020, more than 50 countries and regions around the world are carrying out central bank digital currency research and development.
Break through the shackles and subvert the tradition?
Why are major central banks deploying digital currencies?
Guo Tianyong, director of the China Banking Research Center of the Central University of Finance and Economics, said in an interview that under the wave of digitization, currency as a payment medium, its own digitization is an inevitable trend.
Taking into account the limitations of traditional currency printing and issuance costs, and not easy to carry, digital currency with its unique advantages greatly reduces transaction costs.
Will digital currency overturn the traditional payment system?
Zhang Yansheng, the chief researcher of the China International Economic Exchange Center, told reporters that digital currency is a supplement and substitute for cash in the retail link of M0.
Since digital currency is created based on a digital platform, it is not only more accurate at the measurement level, but also changes traditional payment methods and value storage methods, which will have a major substitute for traditional currencies.
Guo Tianyong pointed out that if the digital currency is led by the government or the central bank, it must coordinate with the original banking system as the leading payment relationship.
At present, China's digital currency belongs to the category of M0. From the perspective of finance, M0 does not have the ability to create currency, and it accounts for a small proportion of the entire currency reserve. Therefore, the scope of digital renminbi is still very limited. How to use it in the future Digital RMB builds more functions and pushes it to larger fields, which is worthy of in-depth study.
"This is a step-by-step process, and we must grasp the rhythm."
What is the future of the digital renminbi?
China's digital currency research and start early, and the current development momentum is fierce, what is the development prospect of the digital renminbi?
Guo Tianyong said that the early advancement of the digital renminbi has been relatively successful, which is conducive to enhancing the internationalization of the renminbi.
With the strengthening of China's economic strength, RMB international business has become more extensive.
Faced with the huge international settlement volume, the advantages of digital currency's high payment efficiency are more easily highlighted.
Zhang Yansheng believes that if digital renminbi is widely used in international settlements in the future, it will bring great convenience to transactions in various markets. A considerable part of the transactions will change from on-exchange transactions to off-exchange transactions. Foreign transactions become online transactions.
"Because China has good national credit and monetary authority credit, it will be difficult for people to reject digital renminbi in international settlements in the future." (End)