Lagarde digital currency

1.

On November 9, 2019, the central bank has not launched digital currency

in 2014, the Central Bank of China set up a special research team to conct in-depth research on the framework of digital currency issuance and business operation, key technologies of digital currency, issuance and circulation environment, and legal issues

in January 2017, the central bank officially established the digital currency Research Institute in Shenzhen

in September 2018, the Institute of digital currency built a trade finance blockchain platform

On July 8, 2019, at the launching ceremony of the digital finance open research program and the first academic seminar, Wang Xin, director of the Research Bureau of the people's Bank of China, disclosed that the State Council has officially approved the research and development of the central bank's digital currency, and the central bank is engaged in corresponding work in organizing market institutions

extended data:

benefits of digital currency

the digitalization of central bank's currency helps to optimize the central bank's monetary payment function, improve the central bank's monetary status and the effectiveness of monetary policy. The central bank's digital currency can become an interest bearing asset to meet the holder's reserve demand for safe assets, and can also become the lower limit of bank deposit interest rate. It can also become a new monetary policy tool

at the same time, the central bank can affect the bank deposit and loan interest rate by adjusting the digital currency interest rate of the central bank, and help to break the zero interest rate lower limit

2. On the issue of issuing their own digital currency, central banks are always less thunderous. Central banks around the world are considering issuing their own digital currencies to compete with cryptocurrencies such as bitcoin, but they have been unable to do so for a long time

the media's attention to the central bank's digital currency has increased significantly, especially after Zuckerberg testified in Congress on the Libra issue and Christina Lagarde acknowledged the "clear demand" for stable currency at her first media reception as president of the European Central Bank, which seems to have changed the public's view on this matter, Let many people in cryptocurrency community think that cbdcs is in sight<

according to the latest survey report released by the bank for International Settlements, central banks in the past seven years have been investigating this technology and assessing its impact. Of the 63 central banks surveyed, 55 said they were unlikely to issue cbdcs in the next three years, and only one reported that they were "highly likely to issue large-scale cbdcs in the next three to six years."

although the proportion of central banks studying cbdcs is very high, the crux of the problem is that it is mainly theoretical and investigative work. Only five central banks have concted more in-depth research and real project development or experimentation - but that still does not mean that they will necessarily issue cbdcs

through close observation, it is more and more obvious that both Libra recently released by Facebook and the new stable currency assets have had a significant impact on the central bank. Today's situation took hundreds of years to form, but it changed in a few months; Competition, the most terrifying and unfamiliar concept that has never been thought of before and penetrated into the elite society of central banks, is now knocking at the door

it can be said that the solution to the current situation is still unclear. Some people who are familiar with these things even say that they are bluffing. However, in Lagarde's own words, the slow and wait-and-see regulatory approach can no longer meet the needs

1. What is central bank digital currency<

what is the difference between central bank digital currency CBDC and other digital currencies

CBDC is a new form of currency, which is directly issued by the central bank in digital form as legal tender. The current form of legal currency is cash, reserve deposit or balance settlement< There are two main differences between CBDC and other digital currencies (including cryptocurrency and other forms of central bank currency):

1. CBDC has nothing to do with cryptoassets. They're not decentralized, they don't have to be blockchain based, and they're certainly not anonymous, they're not unlicensed, they're not censored< 2. Contrary to the current digital cash, the operation structure of CBDC will be different from other forms of central bank currency. CBDC has more powerful functions. They are programmable, can generate interest, can be cleared in near real time, and have cheaper handling charges and wider openness

when designing CBDC, the speed of central banks is different. Different central banks adopt their own approach. However, in general, there are three problems being explored: whether CBDC should be based on token or account number, whether CBDC should be batch (only open to banks) or retail (open to the public), and whether it should be based on DLT

when CBDC is to be implemented, things will become complicated, and there are many thorny problems to be considered

for example, once CBDC is launched, does it need to cancel cash? Should CBDC carry interest? Should they have face value like cash? Or linked to the total price index? What impact will this have on commercial banks? What about anonymity and privacy? All these questions need to be answered<

2. Motivation for issuing CBDC

in the 2017 staff discussion paper, the Bank of Canada gave six reasons for issuing CBDC in an article entitled "central bank digital currency: motivation and impact":

1. Ensure that the central bank provides sufficient cash to the public, and maintain the seigniorage revenue of the central bank

2, Support non-traditional monetary policy

3. Rece overall risk and improve financial stability

4. Improve payment competitiveness

5. Promote financial inclusiveness

6. Curb criminal activities

looking back at the bank for International Settlements survey we analyzed earlier, payment security and domestic efficiency are selected as the most important motives of the central bank. According to a large number of papers published by the central bank and other large financial institutions, for developed countries, the transformation into a cashless society is the main driving factor, while for developing countries, financial inclusiveness, cost rection and operational efficiency are the main motivation

throughout the rest of the reports and the literature that can be found, the fierce competition brought about by bitcoin and other innovations in the cryptocurrency instry, as well as the clear need for "one step ahead", of course, are not listed as the reasons for issuing CBDC< The advantages and potential risks of CBDC are very low.

if the central bank starts to launch CBDC and succeeds in the end, there are many potential benefits

from a technical point of view, CBDC is much better than the current form of legal currency. They can be tracked better, collect taxes more conveniently, transmit monetary policy better, have better financial inclusiveness, and rece the cost of procing physical currency

the most obvious advantage is that payment is cheaper and faster, whether it is domestic payment or cross-border payment

in addition to the design and implementation problems, a key problem of issuing CBDC is that CBDC may increase the risk of bank operation. However, this only happens when banks promise that their deposits can be converted into CBDC on demand, which is not necessarily the case, according to the Bank of England document

4. Facts on the ground

how far is it from us to see a real CBDC appear in the market? It's hard to estimate, but at present, we can sum up the current situation in one sentence: all talk but no practice

if we put aside the failed digital currencies of Ecuador, Tunisia and Venezuela, we can only do theoretical research, a small amount of experiments, and issue some feasible CBDC issuance announcements supported by the state in the future

the most famous CBDC projects in progress are: e-peso in Uruguay (the project was successfully tested in 2018), DCEP in China, "project Inthanon" in Thailand, e-krona in Sweden (still in the research stage)...

5. The revolution has not yet been successful, and comrades still need to work hard

considering the factors mentioned above, Most of the headlines about CBDC's upcoming release are groundless. All projects scheled to be released this year have been delayed

in fact, there is still a long way to go for the birth of CBDC, and to convince the public, we need more than a statement. Given the current situation, it seems that CBDC and other cryptocurrencies may not affect each other - at least for now.

3. According to the roadmap published on the official website, there are two major branches, one is the expansion of underlying functions, the other is the optimization of user experience. The underlying function expansion is mainly to develop new functions on the basis of peer-to-peer payment to support the long-term vision of a real Internet of value (IOV). For example, expand Op_ Return, optimizing the cache architecture for balance, anonymity on the chain, and native protocol component based on op code are designed to support the implementation of functionality
there are two main reasons why user experience optimization is listed separately. First, LBTC wants to build an excellent peer-to-peer e-cash system. Its basic idea is to put payment experience and user first, so it puts it at a high level, such as cross platform light wallet, accelerating payment confirmation speed, optimizing irreversible block mechanism, etc. Second, LBTC has always emphasized superior chain governance system. Before that, there was a standardized SGS (spark governance system) governance system, but it still needs to constantly improve the relevant mechanisms. For example, we should greatly optimize the node parameters and election mechanism, establish the LBTC foundation, multi-channel proposal process, and light wallet's support for the governance function on the chain.

4. At present, the RMB has basically been peripheral. In Southeast Asia, RMB has become another "hard currency" next only to us dollar, euro and Japanese yen. In southwest border areas, RMB is known as "small US dollar" and used as a hard currency; In Northwest China, RMB mainly circulates in five Central Asian countries, Russia and Pakistan; In Northeast China, RMB mainly flows to Russia, North Korea and Mongolia; Hong Kong has the largest cross-border circulation of RMB, which can be freely convertible through various channels. In addition, RMB is also widely used in Macao

as for the regionalization and internationalization of RMB, we can graally seek monetary cooperation within the framework of ASEAN 10 + 1 pseudo economic cooperation. We can fix their respective exchange rates and float jointly with foreign countries. When the time is ripe, we can use strong RMB to replace other currencies or take RMB as the dominant currency to create a single currency and realize monetary unification. Secondly, it can expand to ASEAN 10 + 3 on the basis of ASEAN 10 + 1 and unite with Japan and South Korea. At that time, RMB will really grow into an international currency with far-reaching influence, just like the euro to Europe and the US dollar to America

secondly, in terms of monetary function, we should promote the internationalization of RMB in three steps, that is, adhere to the three-step strategy of RMB settlement currency, RMB investment currency and RMB reserve currency. In this process, we should steadily promote the process of RMB capital account convertibility, actively and steadily carry out offshore financial business, and graally implement the target area management of exchange rate

historically, which country's currency becomes a valuation currency in international trade and capital flow will take the initiative in international economic transactions. Take capital export as an example. Among the three capital flow centers in the world, when Britain and the United States were capital exporting countries, they all used their local currency as the valuation currency, while after the 1970s, when Japan was the capital export center, they used US dollar as the valuation currency. result; Japanese enterprises and financial institutions are very passive in dealing with the exchange rate risk in the foreign exchange market. When the yen rose sharply, these enterprises and financial institutions suffered huge losses. This is considered by many people as one of the important reasons for Japan's economic recession for more than a decade

for a large economic country, if the local currency can not comply with the trend of domestic trade growth and become the pricing currency of the open international financial market and trade, then the national currency will not become one of the major international reserve currencies. This means that the domestic currency has not obtained the international currency status which is relative to the total economic volume and the total trade volume. In order to deal with the macro financial risk of exchange rate fluctuations, the government must hold a large number of foreign exchange reserves. In today's international monetary system, US dollar and euro are the main pricing currencies in the international financial market, so US dollar and euro have become the main reserve currencies in the world. Correspondingly, the foreign exchange reserves of the United States and the European Union are very small. By the end of June 2007, the value of foreign exchange reserves of the United States was only US $41.5 billion, and that of the European Central Bank was only 41.4 billion euros. In contrast, in Asia, although Japan and China are among the top countries in the world in terms of economic aggregate, neither the Japanese yen nor the RMB has gained the status of an important pricing currency in the international financial market. As a result, China and Japan have the largest foreign exchange reserves in the world

with the development of China's economy, it should be our long-term goal to take corresponding strategies to graally integrate RMB into the international reserve currency system, break the current reserve currency pattern of the western world dominated by US dollar and euro, and promote the construction of multipolar reserve currency system. In this process, China should adopt a consistent graal strategy to promote the internationalization of RMB through the regionalization of RMB. At the same time, we should develop an open international asset market valued in RMB and provide more choices of RMB financial assets for foreign investors. Only after such a stage can RMB really gain the status of reserve currency, and we can get rid of the trouble of worrying about the amount of foreign exchange reserves.

5.

About three years ago, celebrities from the Wall Street Journal and the international monetary fund completely ignored the existence of bitcoin and digital currency. Nowadays, the innovation and financial development brought by bitcoin blockchain and other technologies cannot be ignored

The Wall Street Journal recently talked with Christina, the world's most influential financial executive? In a 20 minute interview, Christine Lagarde focused on several factors that affect the current economic world

Christina Lagarde

Lagarde also mentioned the security in the field of digital currency:

as for cryptocurrency and blockchain... We are at the right time and can witness significant development. See how they subvert all walks of life, how they protect the confidentiality of transactions, and how they build communities

she also said:

at present, the development of digital currency is not systematic enough, and it is not enough to pose a threat, and it can not ensure 100% security. But regulators and managers should pay more attention to this instry, because it is easy to become a channel for illegal transactions. We do not want to see these tools appear in the illegal activities of money laundering and terrorist financing

importantly, bitcoin and its related technologies are slowly changing the views of some elites, such as Lagarde. She could have shrugged off the impact of digital currency, but she chose to support the concept and believed that these technologies would become a part of mainstream financial life. Maybe two or three years ago, she thought the opposite. This also proves the continuous development of bitcoin and its technology, and more and more people begin to believe that these technologies will eventually be accepted by the mainstream

As Gandhi said:

first they ignore you, then they laugh at you, then they fight you, and finally you win

(author: okcoin bank. Copyright notice: please contact wechat official number "okcoin" for authorization.)