China's digital currency settlement system

1.

The digital currency of the central bank is DCEP

the name of the digital currency developed by the central bank is DCEP (digital currency electronic payment). DC is digital currency. EP is electronic payment. Payment transmits digital things through a certain way, not paper currency. Therefore, electronic payment itself has the attribute of digital currency

The characteristics of digital currency are: low transaction cost; Fast trading speed; Highly anonymous

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Application of digital currency

I. fast, economic and safe payment and settlement

cross border payment helps RMB internationalization. In 2015, the settlement volume of cross-border payment involving current account is about 8 trillion yuan. To accelerate the internationalization of RMB, cross-border payment and settlement procts and solutions with low cost, high efficiency and low risk are needed

At present, there are still a lot of repetitive human work in the bank's electronic loan process and processing process, and as the basic support of loan issuance, many of the collateral has the situation of false pricing or multiple or even no collateral. We can consider using digital currency to price and track bank collateral:

3. Bill finance and supply chain finance

in recent years, various bill market businesses based on commercial bills have grown rapidly, and bill financing procts have become a hot area of Internet financing. However, about 70% of the current bill businesses in China are still paper transactions, Supply chain finance is also highly dependent on labor costs

reference materials

network digital currency

2.

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

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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

3. It is very clear in the speech of the central bank that the digital currency is M0. What is M0? M0 is cash. We speculate that the basic framework for the central bank to issue digital currency in the future should be a two-tier structure. The core is the database of the central bank, and the periphery is the blockchain of different instries, regions and third parties. Why? Only by using a decentralized system in the second layer can you ensure that the money is controlled by the users themselves and that the digital currency really becomes M0

we speculate that once the central bank issues digital currency in the future, the periphery of the structure must be a decentralized system. At present, blockchain is the best choice

when talking about digital currency, the central bank also mentioned another concept, which is called programmable currency. How to understand? For the computer, it has a certain internal self-control function. Take the early object-oriented language as an example, it requires at least two functions, one is the constructor, the other is the destructor. You have to solve the problem of its creation as well as its extinction

through programming, the central bank can control the whole life cycle of money creation, circulation and withdrawal

in the absence of digital currency and programmable currency, the currency issued by the central bank circulates freely in the society. How to return to the cage in the end? One is the return of derivative currency of commercial banks, the other is the return of basic currency of central bank. The former is controlled by the central bank through deposit reserve and other policies, while the latter is controlled by the tax system. If we go up to programmable digital currency in the future, the central bank will have much more control. Even in circulation, control can be increased. That's why central banks are very interested in blockchain technology.

4.

The people's Bank of China has not issued digital currency for the time being, so there is no legal digital currency in China at present. At present, digital currency has not been recognized in China, let alone legal

at present, all kinds of digital currencies circulating in the market are basically on the edge of the law. China maintains a neutral attitude, but does not like speculation, which is also the basic attitude of the central bank{ RRRRR}

< H2 > development materials

digital currency is abbreviated as digiccy, which is the abbreviation of "digital currency" in English and the alternative currency in the form of electronic currency. Both digital gold coin and cryptocurrency belong to digiccy

digital currency is different from the virtual currency in the virtual world, because it can be used for real goods and services transactions, not limited to online games. The early digital currency (digital gold currency) is a form of electronic currency named after the weight of gold. Today's digital currency, such as bitcoin, lightcoin and ppcoin, is an electronic currency created, issued and circulated by check sum cryptography. It is characterized by the use of P2P peer-to-peer network technology to issue, manage and circulate currency. In theory, it avoids bureaucratic examination and approval, so that everyone has the right to issue currency

5.

Digital currency is a kind of legal tender, which must be issued by the central bank. Both digital gold coin and cryptocurrency belong to digital currency, which is not a network virtual currency, because it is not limited to virtual space, but is often used for real goods and services transactions, such as bitcoin, Wright coin, bitstock, etc. at present, there are thousands of digital currencies issued around the world

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1. Impact on financial infrastructure

the decentralized mechanism of value exchange based on distributed ledger technology has changed the basic settings of gross and net settlement on which financial market infrastructure depends. The use of distributed ledgers also poses challenges to trading, clearing and settlement, as it promotes the disintermediation of traditional service providers in different markets and infrastructures. These changes may have potential impacts on market infrastructure other than retail payment systems, such as large payment systems, securities settlement systems or trading databases

If digital currency and distributed ledger based technology are widely used, it will bring challenges to the intermediary role of financial system participants, especially banks. As a financial intermediary, banks perform the ties of acting supervisors and supervise borrowers on behalf of depositors. Usually, banks also carry out liquidity and maturity conversion business to realize the financing from depositors to borrowers. If digital currency and distributed ledger are widely used, any subsequent disintermediation may have an impact on savings or credit evaluation mechanisms

6.

Do you mean there is no essential difference between digital currency and the existing monetary system? I don't know where to draw this conclusion. At present, the general digital currency mainly includes bitcoin, Ethereum, reborn, Leyte and other virtual currencies. These virtual currencies are very different from the existing monetary system! For example:

1. issuers: the issuers of existing legal tender are national government agencies, generally the central bank. Bitcoin and other digital currencies are issued according to the program encryption algorithm. If we want to say that the issuing subject, even one person can issue them. There is no credibility or coercion

2. credibility. The existing monetary system, that is, legal tender, has the endorsement of national credit, which has more credibility. Bitcoin and other digital currencies rely on algorithms, which are often issued by a community or even indivials, with weak credibility

3. mandatory. The existing monetary system, namely legal tender, is issued by the state and circulates in a country or region according to law. Digital currencies, such as bitcoin, do not have the power to enforce the law

4. volatility. In the current monetary system, there are exchange rate fluctuations in various legal currencies, but they are basically in a relatively stable state. As for bitcoin and other digital currencies, you can look at the market of digital currencies on investing. It can be seen that the price difference of bitcoin even one day is more than 10%, which is obviously unstable

   

7. In fact, the technical systems corresponding to various digital currencies are quite different
moreover, the development of digital currency is still immature.

8. Legal digital currency is different from digital currency in issuing mode and supervision mechanism
1. Legal digital currency: in essence, it is still the debt issued by the central bank to the public, which belongs to a form of digital currency. Legal digital currency should be the digital currency with legal status, which is the main body responsible for the issuance of national sovereignty.
2. Digital currency: virtual currency is represented by bitcoin and ether currency, which is not issued by central institutions, It has the characteristics of anonymity. It is not under the existing legislation, so it can not be recognized as money and has no monetary value.

9.

As an emerging technology, digital currency plays an important role in improving financial efficiency, promoting cross-border payment and adjusting the monetary system

All in all, China's digital currency is taking the lead in the world, and it is inevitable to promote the international market