The role of SNB cryptocurrency in issuing national digital curre
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Japan
among Asian countries, Japan seems to be the first country to support cryptocurrency. On the contrary, in the past few years, China has been cracking down on ICO and closing down the trading business of digital currency exchanges in China. Compared with China's strict restrictions, Japan is undoubtedly far ahead in the field of cryptocurrency
maybe it's because of the anonymous people (or teams?) who developed bitcoin Japan's pseudonym is Nakamoto, so Japan's friendliness to cryptocurrency ranks at the top
after being attacked by hackers, the Japanese based Mt. GOx exchange finally closed down in February 2014, which is still the biggest scandal in the digital currency world. After that, Japan's licensed cryptocurrency exchanges came together to form a new self regulatory organization, which put forward guidelines to legalize ICO and formulated clear instry standards to protect investors, while allowing the instry to grow and continue to innovate
members of this association, called ICO business research group, include members of Parliament, academics, bankers and the CEO of bitflyer. Bitflyer is the largest cryptocurrency exchange in Japan. According to the government study, the legislature may allow potentially profitable ICO and cryptocurrency exchanges to continue trading, but at the same time, it must provide the government with more insight into these activities and enhance transparency
blockchain, and each token is said to be supported by one barrel of crude oil. However, analysts generally believe that Maro is obviously lying
nevertheless, as of the end of April, it was reported that Venezuela could offer India a 30% discount if India used petro currency to pay for its crude oil. Bitcoin magazine reported that "Venezuela has assured the buyer that petro currency will have all the functions of legal tender, can pay taxes and can be converted into Venezuelan hard currency, namely Bolivar
while many people are skeptical of petro itself and the Venezuelan government's move to integrate cryptocurrency into its declining economy, others believe that any effort to win the credibility of cryptocurrency is worthwhile. David Garcia, senior vice president and partner of ripio credit network, pointed out that Latin America is going through a transitional period
Latin America is in a difficult situation e to political corruption and economic crisis, and is troubled by high inflation and rapid devaluation of local currency, especially in Venezuela. Garcia believes that innovative ideas and solutions such as blockchain and cryptocurrency are necessary for these countries to develop in a positive direction3. Sweden
in 2015, Sweden became the first country in Europe to approve the trading of two kinds of bitcoin exchange traded notes (ETN), which are managed by XBT providers. The Swedish Krona denominated bitcoin tracker one XBT (ST: se0007126024) fund and bitcoin tracker EUR XBT provider (ST: se0007525332) can be traded on Nordic Nasdaq, the main Swedish exchange
since its launch, XBT has been launched in Denmark, Finland, Estonia and Latvia. As of early December 2017, cointegraph announced that Sweden's ETN "is more than 80% of the US ETF". In mid January, CNBC said that Sweden's bitcoin investment project attracted $1.3 billion
in addition, the Swedish central bank has been considering the development of an electronic currency called e-krona to cope with the situation that Sweden is rapidly becoming the first cashless society in the world. However, Sweden's banking sector has hit back. Hans Lindberg, chief executive of the Swedish Bankers Association, said in an interview on April 17: "in terms of e-money, there is already a lot. There are bank cards, credit cards... And other electronic solutions. The most likely scenario in the future is that the Swedish central bank will stick to wholesale business. "< However, James Pomeroy, a global economist at HSBC, believes that Sweden is still likely to become the first country in the world to issue digital currency, which may be launched in the next few years. Venezuela may be ahead in government supported cryptocurrency issuance, but Sweden, a Scandinavian country with stronger economy and more trusted regulators, may still disrupt the existing order of cryptocurrency and even lead the European cryptocurrency instry< Switzerland
4. The Swiss financial market supervision authority is at the forefront in clarifying the regulation of cryptocurrency and supporting ICO. Marc bernegger, a Swiss financial technologist, cryptocurrency entrepreneur and consultant to Swiss real coin, said Switzerland has traditionally been a haven of wealth. To some extent, this benefits from Switzerland's more open financial regulation and a long culture of protecting the privacy of Swiss banking institutions' customers. Bernegger pointed out that Switzerland has been "looking forward" to cryptocurrency assets as part of overall wealth management and is "preparing for changing economic forms."
the surrounding area of Zug in North Central Switzerland is called crypto Valley, which has been called crypto valley since Ethereum ICO was launched in 2014. For cryptocurrency entrepreneurs, developers and investors, cryptovalley is one of the most active ecosystems,5. Israel
in Israel, discussions on the regulation of cryptocurrency continue, and legislators are looking for ways to protect investors. Although Israel's banking system has failed to help promote bitcoin related business, Union Bank of Israel, the sixth largest bank in Israel, is being sued by a local cryptocurrency miner for stopping transferring funds from bitcoin exchange to the miner; In addition, Israel's second-largest bank, bank Leumi, was intervened by the district court and the country's Supreme Court when it tried to block the account activity of a local cryptocurrency exchange. This is undoubtedly a major victory for the local cryptocurrency instry
in addition, it has recently been reported that the Central Bank of Israel has been considering the possibility of issuing state supported cryptocurrency for several months. According to the Jerusalem Post, an anonymous source said, "digital shekel can record every transaction through mobile phones, making tax evasion more difficult." If a digital Shekel is introced, its value will be equal to that of an entity
in terms of technological innovation, Israel's start-up corporate culture is at the forefront. Roy meirom, co-founder and vice president of business development of wemark, pointed out that many of the 300 multinational R & D centers operating in Israel are committed to the application of blockchain<
Roy meirom also said that this small middle east country, commonly known as the "start-up country", is rapidly becoming the development center of blockchain< Bermuda
Bermuda, a member of the Commonwealth in the North Atlantic and Caribbean, has been actively seeking the adoption of cryptocurrency related regulations to begin to establish an appropriate framework to promote cryptocurrency business activities, including cryptocurrency exchanges, wallet services and payment providers. Recently, the Bermuda Monetary Authority's virtual currency business act was passed in the house of Commons
Bermuda has carried out relevant legislative activities on ICO in the form of amending the Companies Act 1981 and the limited liability companies act 2016. At the end of last year, Bermuda's prime minister and Finance Minister David Burt set up a blockchain working group, which is divided into two groups: the legal and regulatory Working Group on blockchain and the commercial working group on blockchain
7. Berlin, the capital of Germany, is perhaps one of the EU's most cryptocurrency friendly cities. In 2013, Berlin was called the "bitcoin capital of Europe" by the guardian, and it has always maintained this status. At present, people can use bitcoin to buy apartments in Berlin, make holiday reservations, and pay for meals in various fashionable local restaurants
Thomas Schouten, marketing director of lisk, a Swiss based blockchain application platform, said the application chain has a major contractor office in Berlin. Schouten said Berlin provides a vibrant start-up and technology space with a huge talent pool and vibrant culture, making it easy for companies to attract employees. In addition, he said that Germany and the German government are open to blockchain technology
in 2014, Germany became the first country to accept bitcoin as a currency, highlighting its open attitude. Similarly, board members of the Bundesbank have called for effective and appropriate regulation of cryptocurrencies and tokens. In fact, Joachim wuermeling, director of the Bundesbank, has pointed out the need for international cooperation on this issue:
to this end, a number of decision makers of the Bundesbank have participated in discussions involving the whole EU region, including stimulating the cryptocurrency instry in the whole EU region through the European block chain partnership "Scientists and engineers in the instry, many of them retired members of Israel's elite military intelligence forces, have transferred to fill the huge talent demand of the instry, and are supported by more and more blockchain start-ups and supporting ecosystems." -
"because the regulatory capacity of a single country is obviously limited, only by maximizing the potential of international cooperation can virtual currency be effectively regulated."
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.
Digital currency can be understood as the digitalization of RMB, which has two obvious advantages: "no account payment" and "no network payment". After Facebook launched Libra this year, the central bank's digital currency has also stepped in. We see both challenges and opportunities
in a word, digital currency is still RMB in fact, but some changes have taken place in its form. We say that digital currency is of great significance. It not only enhances the security and controllability, but also makes counterfeit currency "invisible". In addition, the issuance of the central bank's digital currency is also concive to the central bank's more convenient and transparent management
It is not currently available
at present, the Central Bank of China has not issued and approved the digital currency of issuers and investors
However, at the beginning of the year, the central bank held a seminar on digital currency, at which it made it clear that it was necessary to issue digital currency as soon as possible, and the central bank put the issue of digital currency on the agendahowever, so far, the central bank has not issued any digital currency, and Zhou Xiaochuan, the governor of the central bank, said that the time is not ripe to issue digital currency. Moreover, the digital currency issued by the central bank is different from bitcoin, Ruitai, Laite and other digital cryptocurrencies, and the digital currency issued by the central bank is not decentralized
when the central bank issues digital currency, it needs to establish a basic digital currency system. In this system, the central bank is in charge of the digital currency issuing bank, the commercial bank is in charge of the bank, and the public and indivials hold digital wallets. This is not much different from the existing monetary system in essence, but the managed currency is changed from paper money to digital cryptocurrency
in terms of issuing mechanism, there are two modes:
one is the traditional mode of "central bank commercial bank", that is, the central bank issues digital currency from the issuing bank of the central bank to the Bank of the commercial bank. When an indivial withdraws money from the commercial bank, the digital currency is transferred from the commercial bank to the personal digital wallet
another mode is the "central bank public" mode, that is, the central bank can directly issue digital currency from the currency issuing bank to the digital wallet of the public and indivials. In essence, no matter which issuing mode, money is ultimately held by the public, which is the debt of the central bank to the public
in terms of positioning, the central bank's digital currency DCEP is not simply the digitization of banknotes, but to replace M0 (banknotes and coins) and change the form of the base currency. M0 refers to the cash in circulation, that is, the sum of the cash on hand of various units outside the banking system and the cash held by residents. The digitalization of banknotes generally refers to online replacement of lines, such as Alipay and WeChat, which all belong to online payment. However, both of them need to bind bank cards to pay. DCEP does not have this restriction, that is to say, when using DCEP for payment, there is no need to bind any bank account
the name of digital currency is easy to associate with cryptocurrencies such as bitcoin, but there is a fundamental difference between DCEP and them: DCEP is centralized while bitcoin is decentralized
to be exact, DCEP is a kind of sovereign credit currency, while the latter two are the procts of the idea of "currency non nationalization". The paper money itself has no value. The reason why it can perform the function of currency is that it is supported by the national credit and has the nature of legal compensation and compulsion. However, cryptocurrency such as bitcoin is a kind of private currency in essence and has no solid credit foundation. Therefore, any cryptocurrency with its own mining algorithm, following P2P protocol, limited amount, reaching a certain degree of consensus and decentralization can be a substitute for bitcoin
comparatively speaking, if there is a substitute for DCEP, it can only be other forms of RMB, such as banknotes and coins. That is to say, the digital currency DCEP issued by the central bank is still the debt of the central bank to the public, and this relationship between creditor's rights and debt will not change with the change of currency form.
because a slight error will affect the operation of the whole financial system, when you give up cash payment and completely rely on digital cryptocurrency, it means that there is no plan B when the system encounters a bug