From nine questions, take you to understand the past and present of the central bank's digital currency

The legal digital currency of China "can now be said to be out." Mu Changchun, Deputy Director of the People's Bank of China, spoke at the third China Financial 40 -person Yichun Forum on August 10, again Pushing the central bank's legal digital currency to the public's vision.
In 2014 Zhou Xiaochuan's proposal to develop central bank digital currencies, and to Mu Changchun's "calling out" this year, five years have passed. After five years of polishing, what exactly does the central bank's digital currency look like? What kind of development has gone through? What impact will the future bring?
. Model: Double -layer operation and launch system, centralized management mechanism
The central bank digital currency English as "DC/EP", "DC" is the abbreviation of "Digital Currency" " , "EP" is an abbreviation of "Payment (electronic payment)". The main function of digital currency of the People's Bank of China is as an electronic payment method.
The central bank digital currency has its own characteristics in terms of operation and launch, management model and technology selection.
1. Double -layer operation and launch system: 4 points of consideration and 4 influence
First of all, the central bank digital currency design a double -layer operation and launch system instead of the single single by the People's Bank of China directly issued digital currencies to the public. Layer operation system. Under the dual -layer operation system, the upper level is the central bank. The central bank is a credit guarantee for the legal digital currency issued by the central bank. Therefore, the central bank's digital currency is the same as the renminbi. Composition, while commercial banks and other institutions are responsible for issuing central bank digital currencies to the public, they need to pay a full reserve 100%to the central bank to ensure that the central bank's digital currency is not excessive.
If the central bank's digital currency adopts a double -layer operation and launch system:
First, China is vast, populated with a large population, and complex economic structure. Not the same. Therefore, the issuing central bank digital currency in China is an extremely complicated system engineering. The single -layer digital currency operation and launch system will allow the central bank to face all the public alone, bringing great challenges to the central bank's operations.
Secondly, commercial banks and other institutions have developed a relatively mature IT technology facilities and service system. In terms of the use of fintech and related talent reserves, it has accumulated some experience. Give full play to the advantages of commercial banks and other institutions in resources, talents and technology, while avoiding the huge waste of another stove.
Third, the number of digital currency -oriented users issued by the central bank is a wide range of publics, covering a large scale of the 100 billion population. It is not easy to ensure stable and efficient operation and face many risks. The double -layer operating system helps resolve risks and avoid excessive risk concentration.
Fourth, under a single -layer digital currency operation and launch system, it may lead to financial release. Digital currencies that the central bank directly put on the public in terms of credit levels is higher than the deposit currency of commercial banks, which may have a crowding effect on commercial bank deposits, which will affect the loan investment capacity of commercial banks.
The impact of the central bank's digital currency adopting the double -layer operation and launch system is reflected in the following four aspects:
First, the central bank's issuing digital currency does not change the currency's debt and debt relationship in circulation. At first, the central bank exercised the money issued by the country's functions. The public accepts the currency issued by the central bank, which is equivalent to borrowing real values ​​such as gold, and the public only holds the payment voucher, that is, currency is the central bank's liabilities to the public. This credit relationship and liabilities have not changed when the state does not rely on gold reserves with the national credit compulsory regulations. From this perspective, all the currency in circulation, including the central bank's digital currency issued by the central bank, is the central bank's liabilities.
Secondly, the central bank's issuing digital currency does not change the existing currency investment system and dual account structure. Starting with the "Administrative Measures for the Bank of the Bank of China" issued by the People's Bank of China in October 1994, after more than 20 years of development, my country has basically formed a currency release system supported by the structure of the dual account. The central bank's digital currency also adopts a double -layer operation system similar to the dual account structure.
Figure 1: Compare the comparison of the structure of the dual account and the double -layer operation system

third, without affecting the existing monetary policy transmission mechanism, the central bank's digital currency will not strengthen the cyclical period effect. Economic growth generally experiences a complete cycle of depression, recovery, prosperity, and crisis. When economic prosperity, the expanded monetary policy is a cyclical policy, and it becomes a counter -cyclical policy when the economy is depressed. Policies are counter -cyclical policies during economic prosperity, and periodic policies when economic depression. The expanded monetary policy during economic prosperity will increase the pressure of inflation. The tightening monetary policy during economic depression will increase the pressure of currency tightening, which is the cyclical effect. Since the digital currency issued by the central bank does not affect the existing monetary policy transmission mechanism, it is naturally isolated from the periodic effect.
Fourth, digital currency issued by the central bank focuses on replacement of M0 currency instead of alternatives to M1 and M2 currencies.
(Note: M0, M1, M2 are important indicators used to reflect the amount of currency supply. M0 is cash circulating outside the banking system. Everyone's access to banks will affect the increase in M0 in the market. Reduction; M1 is a narrow currency, "M1 = M0 Enterprise's current deposits in banks"; M2 is a broad currency, "M2 = M1 quasi -currency". The quasi -currency here includes regular deposits, residential savings deposits, other deposits, securities company customers Deposits of deposits, housing provident fund centers, deposits of non -deposit financial institutions in deposit financial institutions, etc. M1 reflects the real purchasing power in the market, and M2 also reflects reality and potential purchasing power. If M1 has a faster growth rate, consumption and terminal market will be market market. Active; if M2 has a faster growth rate, investment and intermediate markets are active.)
M1 and M2 currencies have basically realized electronic and digital in China. The increasing efficiency of various types of network payment methods of bank banking systems and non -bank payment institutions has been able to meet the needs of my country's economic development.
But there are still three major problems on the M0 currency side: first, the anonymity of the existing M0 makes it the risk of money laundering and terrorist financing; second, the Internet payment is based on bank cards The account coupling model cannot meet the public's demand for anonymous payment. Third, there are still regions with poor bank account services and communication networks in China. The local public's dependence on M0 currency (cash) is relatively high.
Therefore, the central bank's issuance of digital currency that focuses on replacing M0 is both in line with national conditions and in line with the public's demand for small high -frequency payment business (set transaction limit and balance limit according to different levels of wallets), and can also effectively prevent M0 Currency is used for risks such as money laundering and terrorism financing.
2. Centralized management model: There is essential differences with digital currency such as Bitcoin
If digital currencies of China adopted a centralized management model, which has a decentralized digital currency represented by Bitcoin. Essential differences.
1) The central bank's digital currency is still the central bank's liabilities to the public. This debt and debt relationship does not change with the change of the currency form;
) The currency regulation function needs to continue to adhere to the centralized management model;
3) The central bank's digital currency's double -layer operation and release system is performed by the designated institution. The currency is over -issuing;
4) As long as the dual account system and the original monetary policy transmission mechanism have not changed, the central bank's central management model and status will not change.
Finally, for a central bank's digital currency system that needs to support the wide public use, if the architecture of pure blockchain technology is adopted, the high composite performance required at the retail level cannot be achieved. Therefore, in the choice of technical roads, China's central bank digital currency does not preset technical routes or rely on a certain technology. In addition, the relevant person in charge said that the central bank's digital currency can support smart contracts, but it will only support smart contracts that are conducive to monetary functions. They will still maintain a more prudent attitude towards smart contracts that exceed monetary functions. In addition, some operating institutions designated by the central bank will also use different technical routes to develop statutory digital currencies, and eventually achieve system optimization of digital currency through market competition.
. Development process:
The research on digital currency in digital currency can be traced back to 2014, so far for five years.
If it is said that in 2014, Zhou Xiaochuan's proposal to carry out legal digital currency research and development was the beginning of all this. Then the establishment of the Digital Currency Research Institute in 2017 was a turning point in this story. In the past five years, the People's Bank of China has based on the digital currency research institute as the core and jointly several commercial banks to study the feasibility of central bank digital currencies from a multi -dimensional currency plan prototype and digital bills.
On August 2, 2019, the central bank convened the central bank to hold a TV meeting in the second half of 2019, clearly pointing out that it is necessary to accelerate the development of my country's legal digital currency (DC/EP) in the second half of the year, and timely follow domestic and foreign virtual currency at home and abroad development trend.
Table 1: The progress of digital currency research on the central bank of China

. Voice of all walks of life: Nine issues of digital currency of the central bank
1. Why did the central bank start the 996 work of statutory digital currency research last year? model?
Ar Xiao Lei analyzed the situation in the same period last year and found that in June last year, the United States began to impose tariffs on China's transmission of goods for the first time. Sino -US trade frictions increased, the RMB exchange rate decreased, and the demand for digital currencies in domestic markets increased. The state starts from the level of public opinion, including CCTV Finance's production of the "Focus on the Turbish Market Chaos", the Internet Information Office seals many blockchain self -media, and the five ministries and commissions have issued risk prompts. Last June, the Central Bank of China Digital Currency Research Institute announced four patent declarations within one month. Based on these news, Xiao Lei believes that since June last year, China has strengthened control from two levels. The central bank must receive instructions to request the pace of accelerating the development of legal digital currencies, so there is 996 in Mu Changchun's mouth.
2. China has developed mobile payments. Why do the central bank digital currency need to be needed?
Mu Changchun bluntly, for the people, the boundary between the basic payment function between electronic payment and central bank digital currency is actually relatively vague. However, the actual central bank's digital currency will be different from electronic payment in some functions. From a macroeconomic perspective, the capital transfer of electronic payment instruments must be completed through traditional bank accounts, and the "account coupling" method is adopted. The central bank's digital currency is "account loosening", which can be separated from the traditional bank account to achieve value transfer, which greatly reduces the degree of dependence on the account of the transaction link. The central bank's digital currency can be as easy to circulate as cash, which is conducive to the circulation and internationalization of RMB, and can achieve controllable anonymous.
It Yang Dong, director of the Fintech and Internet Research Center of Renmin University of China, from the perspective of the inevitable perspective of currency development, believes that currency will inevitably develop in a low cost, reliable, and convenient direction. The form is getting more and more free. The password tokens are the mainstream development direction of the current currency. Although my country's mobile payment is in a relatively leading position internationally, this advantage is not absolute. The release of libra sounded the alarm to our country and could cause a significant impact. "In the future, the struggle of data resources will definitely become more and more intense. my country's payment field, especially the small retail payment field, will face more challenges. The best way is to launch legal digital currency to deal with it. At this level, the central bank The introduction of statutory digital currencies is also conducive to the growth of my country's payment industry. "
Xiao Lei also said that the central bank's digital currency is the purpose of eliminating cash regardless of the design goals. But the problem is that without digital currency, cash will gradually disappear, which is a historical trend.
3. Is the central bank's digital currency interest payment?
Fan Yifei, Vice President of the People's Bank of China, said in public in public in early 2018 that because the central bank's digital currency is an alternative to M0, it should not deal with its payment interest. This will neither cause "financial disconnects", nor will cause inflation expectations. Correspondingly, it will not have a great impact on the existing monetary system, financial system and the actual economy operation.
and Long Bai Tao believes that the reasonable central bank's digital currency design must pay interest. The adjustable interest rate for the central bank's digital currency payment can maintain the price stability and maintain the parity of the central bank's digital currency and other currencies. "Adjustable interest rates can increase the demand for central bank digital currencies without the need to adjust the central bank's balance sheet, no need to break the ring parity relationship, nor requires price -level adjustment."
4. The central bank's digital currency = central bank cash digitalization?
The same day as Mu Changchun, Shao Fujun, chairman of UnionPay, also expressed his research on statutory digital currencies on August 10. He believes that statutory digital currencies are not only digitalization of currency, but also through the combination of intelligent technology to design through intelligent contracts to better solve the trust problems of both parties in trading, as well as the problem of synchronization of information flow and capital flow. This advantage can be greatly simplified. A more complicated transaction process between traditional financial institutions.
5. The central bank's digital currency and libra
It always compare the central bank's digital currency and Facebook's libra, but Zhu Chen, the founder and currency scholar of Zhibao.com, believes that the two are very different. LIBRA is based on fiat currency credit and is subject to the central bank and financial institutions; the central bank's digital currency is upgraded to the fiat currency -digitized the original central bank currency (M0). Cash's currency attributes. The specific scenario of the central bank's digital currency is the payment side managed by the central bank, such as transactions between bank reserves, and the digital upgrade of cash, which is not mysterious. For ordinary people, the central bank's digital currency allows transactions and payment to be in the central bank's network. While improving convenience, it has also lost the anonymity and privacy of banknotes.
The accountant Sun Tianqi, the total accountant of the Foreign Exchange Bureau, said that LIBRA should be regarded as a foreign currency and included in the overall framework of my country's foreign exchange management. In addition to the country's very few situations, the country must be settled in RMB, including the valuation and settlement of domestic transactions in digital environments, and must not appear in the digital environment of LIBRA or US dollar.
6. The influence of China's launch of central bank digital currencies?
Shao Fujun believes that the positive impact of the launch of the central bank's digital currency is reflected in: 1. Improve the efficiency of monitoring on currency operation, and enrich the means of monetary policy. The central bank's digital currency issuance will make it possible to collect data such as currency creation, accounts, and flow in real time. It provides useful references for currency investment and monetary policy formulation and implementation, and provides useful means for economic regulation. At the same time, the central bank's digital currency can also effectively provide some help in anti -money laundering and counter -terrorism financing. 2. It is conducive to improving the level of intelligence of the transaction process; 3. Effectively improve the efficiency of payment, especially cross -border payment, and establish an open payment environment.
Itdrait research institutes believe that China ’s launch of central bank digital currencies at least in defending digital sovereignty; providing new monetary policy instruments, improving the effectiveness of monetary policy, and promoting the internationalization of RMB.
but Tan Yaling, dean of the China Institute of Foreign Exchange Investment, believes that using digital currency to promote the internationalization of the RMB is an idealism. After all Determination, it is difficult to eliminate or replace. "At present, China's finance is in a process of tone structure. We must turn it into" finance as supplemented, economic entities. " It is still the main financial level, so I have doubts about whether it has a promotion effect on the real breakdown. "
Chen Jibing, the Glacier Ideological Library Research Institute, also said that in the foreseeable future, traditional fiat currency is still the still is still the traditional fiat currency is still the still. The main circulation medium in socio -economic, digital currency will temporarily try and supplement.
7. The problem of digital currency facing the central bank of China
Longbai Tao believes that the central bank's digital currency is the core goal of achieving the internationalization of RMB, the biggest challenge Essence In response to this challenge, it can be resolved by accelerating the exchange of capital items, but this is not a "most fundamental and thorough" solution. The more effective way is to share the coinage rights through the central bank's digital currency and friendly countries.
, in Shao Fujun's view, the problem of the current central bank's digital currency in China is mainly reflected in: 1. There are problems with technical realization. The current technical level is indeed difficult to achieve mass -time data collection, monitoring and analysis of massive monetary real -time data, and it is also difficult to carry out high -efficiency and accurate programming operations; 2. It is difficult for international coordination. The supervision of the payment markets in various countries is very different, and the departure points and goals of digital currencies in various countries are also very different. 3. Insufficient underlying foundation. Lack of corresponding underlying operation specifications, but also lack of corresponding regulatory mechanisms.
8. Is it based on the blockchain?
Mu Changchun revealed in his speech that when the Digital Currency Research Group of the People's Bank of China first studied digital currency of the central bank, he had made a prototype completely adopted by the blockchain architecture, but based on the existing technology, it was impossible to reach the retail level. High and merging requirements. Therefore, at the end of the central bank, the central bank maintains the neutrality of technology, does not preset technical routes, and does not rely on a certain technology.
This said that the central bank is currently in the "horse racing" and market competition preferred. Several designated operating institutions adopt different technical routes for the development of digital currencies. Who's route is good, who will eventually be accepted and accepted by the people, who will eventually win the game.
Peng Xiaochuan, the former president of the People's Bank of China, also wrote a few days ago that one of the most important tasks of the central bank is to help build a competitive environment, make the best technology highlight and develop, and achieve better through competitive selection to achieve better. Technical application. Competition is a dynamic process. Because the technical progress is fast, a technology will have a large market share at a certain stage. Previous situation.
9. How do people get central bank digital currencies?
The way of getting the central bank's digital currency in the future is about three categories. The first category is to open a digital currency wallet to the bank and directly hold the cash on the hand, including banknotes and coins, and replace it with digital currency (counter processing at the counter processing ); The second category is to directly get the money on the existing account, buy online with online banking, similar to the money in the bank account to Alipay or WeChat payment (online processing); I transfer to you, you transfer to me, or I have something to sell, and I only collect digital currencies. In the future, there may be three forms of payment in China, online banking, third -party payment (Alipay, WeChat payment, etc.), and official digital currency. The user depends on the user