Negative nominal interest rate of digital currency
Publish: 2021-04-20 13:32:14
1. 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.
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.
2. The core value of CBDC can be summarized as four points: first, the original purpose is to let the central bank better manage money creation and supply, enhance the effectiveness of monetary policy transmission mechanism and better deal with the business cycle. Second, the construction of payment and clearing infrastructure based on blockchain related technologies can rece costs and increase efficiency. Digital currency can greatly rece the cost of currency issuance, circulation, use and other links, and realize banknote free transactions, which is also in line with the current trend of rapid development of electronic payment. Third, it has given the central bank stronger control over the monetary system, such as KFC, anti money laundering, anti-terrorism financing, and some targeted policies. Before the launch of Libra, the central bank attached importance to CBDC mainly for the above three purposes. But now, the significance of CBDC in promoting the internationalization of RMB has become more important than ever. This is the fourth purpose of the central bank. Judging from the current progress of RMB internationalization, there are indeed many difficulties. One is the US led encirclement and interception, and the other is the turbulence in the stock and exchange markets. In order to break the encirclement led by the United States, realize the normal development of the stock exchange market and the foreign exchange market, and realize the internationalization of RMB, it is really a good way for the central bank to issue digital currency. On the 10th anniversary of RMB internationalization, RMB internationalization has made remarkable achievements. 13 international financial institutions around the world began to pay attention to China's bond market. In the tide of interest rate rection in developed countries, negative interest rate has become a conventional means, and China's bonds are very competitive in the world. As of the second quarter of 2019, 38 countries have signed currency swap agreements with China, with a total amount of 3.67 trillion yuan. The one belt, one road, which one belt, one road to push forward, is continuously creating demand for RMB internationalization, and the export of RMB has become an important means of "one belt and one road" internationalization of RMB. In addition, RMB is one of the most active currencies in the global foreign exchange market, and London has surpassed Hong Kong as the world's largest offshore RMB foreign exchange trading center. With the steady development of China's economy, RMB assets will continue to be favored by all countries in the world< One belt, one road or other friendly country, was also shared by the Central Bank of China when it issued the CBDC. It shared some of the mint rights with br />
CBDC. How to participate? Including the following two cases, let's take Kazakhstan as an example. The first is that Kazakhstan can issue RMB denominated Kazakh government bonds. The issuer is Kazakhstan, but the RMB denominated bonds are sovereign bonds for Kazakhstan, which can also be sold to the Central Bank of China in exchange for CBDC. The second is that Kazakhstan issues treasury bonds denominated in its own currency, which are issued by Kazakhstan and priced in its own currency. This method is the easiest for Kazakhstan, because this is their own national debt, which is sold to the Central Bank of China, which gives it CBDC. The similarities between the two lie in that they both sell treasury bonds to the Central Bank of China, but the issuers of treasury bonds are not the same, and the pricing currencies of treasury bonds are not the same, so the requirements for Kazakhstan are not the same. In theory, these ways can be used as a political tool to influence and regulate the relationship between the Chinese government and Kazakhstan<
4 digital currency will become the biggest magic weapon of RMB internationalization
China is now facing the biggest challenge, in terms of currency, in fact, the internationalization of RMB. The monetary settlement system based on US dollar has brought great problems to the decision-makers outside the US dollar. The best way to rece the status of US dollar is to replace us dollar with a global digital currency to end the dominant advantage of US dollar. The Chinese version of CBDC is likely to become the biggest magic weapon to promote the internationalization of RMB and end the hegemony of US dollar. The opportunity for RMB internationalization lies in the trend of de dollarization. Therefore, we need friendly countries other than US dollars to participate in China's digital currency. Taking the lead in the use of digital currency in block trading and financial settlement to bypass the restrictions on trading in US dollar will certainly realize the development of de dollarization and form a new currency trading system dominated by China and participated by many parties. So how to achieve it? In essence, it is to transfer benefits, so that non dollarized friendly countries can participate in the issuance process of CBDC, and even share the seigniorage of RMB. It is the most effective magic weapon to embody the spirit of democratization and benefit sharing of blockchain and bitcoin in the design of sovereign currency, which is also the most practical way to realize the internationalization of RMB.
CBDC. How to participate? Including the following two cases, let's take Kazakhstan as an example. The first is that Kazakhstan can issue RMB denominated Kazakh government bonds. The issuer is Kazakhstan, but the RMB denominated bonds are sovereign bonds for Kazakhstan, which can also be sold to the Central Bank of China in exchange for CBDC. The second is that Kazakhstan issues treasury bonds denominated in its own currency, which are issued by Kazakhstan and priced in its own currency. This method is the easiest for Kazakhstan, because this is their own national debt, which is sold to the Central Bank of China, which gives it CBDC. The similarities between the two lie in that they both sell treasury bonds to the Central Bank of China, but the issuers of treasury bonds are not the same, and the pricing currencies of treasury bonds are not the same, so the requirements for Kazakhstan are not the same. In theory, these ways can be used as a political tool to influence and regulate the relationship between the Chinese government and Kazakhstan<
4 digital currency will become the biggest magic weapon of RMB internationalization
China is now facing the biggest challenge, in terms of currency, in fact, the internationalization of RMB. The monetary settlement system based on US dollar has brought great problems to the decision-makers outside the US dollar. The best way to rece the status of US dollar is to replace us dollar with a global digital currency to end the dominant advantage of US dollar. The Chinese version of CBDC is likely to become the biggest magic weapon to promote the internationalization of RMB and end the hegemony of US dollar. The opportunity for RMB internationalization lies in the trend of de dollarization. Therefore, we need friendly countries other than US dollars to participate in China's digital currency. Taking the lead in the use of digital currency in block trading and financial settlement to bypass the restrictions on trading in US dollar will certainly realize the development of de dollarization and form a new currency trading system dominated by China and participated by many parties. So how to achieve it? In essence, it is to transfer benefits, so that non dollarized friendly countries can participate in the issuance process of CBDC, and even share the seigniorage of RMB. It is the most effective magic weapon to embody the spirit of democratization and benefit sharing of blockchain and bitcoin in the design of sovereign currency, which is also the most practical way to realize the internationalization of RMB.
3. It's true. One of my colleagues earns a lot of money by buying small shellfish digital currency, investing 100000 yuan and earning more than 2000 yuan a day
4. Hello, there's no problem with this graphics card with this kind of hardware.
even if it's live broadcasting, it's no problem. Live broadcasting is mainly about processor and memory. You can satisfy it, but you need to ensure the network speed
even if it's live broadcasting, it's no problem. Live broadcasting is mainly about processor and memory. You can satisfy it, but you need to ensure the network speed
5. It is wrong to say that China's digital currency comes from the people, because it comes from the present. Science.
6. As of August 21, 2019, the digital currency Research Institute of the central bank has applied for 74 patents for the design of digital currency
this model does not change the relationship between creditor's rights and debt of currency in circulation, the existing money supply system and al account structure, will not constitute a competition for commercial banks' deposit currency, will not increase the dependence of commercial banks on the inter-bank lending market, will not affect the lending ability of commercial banks, and will not lead to the phenomenon of "financial disintermediation". At the same time, because it does not affect the existing monetary policy transmission mechanism, it will not strengthen the pro cyclical effect under the pressure environment, and it can improve the convenience and security of payment, and it also has the credit advantage of central bank endorsement<
practical significance:
the digitalization of central bank's currency helps to optimize the central bank's monetary payment function and 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's deposit and loan interest rate by adjusting the central bank's digital currency interest rate, and help break the zero interest rate lower limit
for reference.
this model does not change the relationship between creditor's rights and debt of currency in circulation, the existing money supply system and al account structure, will not constitute a competition for commercial banks' deposit currency, will not increase the dependence of commercial banks on the inter-bank lending market, will not affect the lending ability of commercial banks, and will not lead to the phenomenon of "financial disintermediation". At the same time, because it does not affect the existing monetary policy transmission mechanism, it will not strengthen the pro cyclical effect under the pressure environment, and it can improve the convenience and security of payment, and it also has the credit advantage of central bank endorsement<
practical significance:
the digitalization of central bank's currency helps to optimize the central bank's monetary payment function and 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's deposit and loan interest rate by adjusting the central bank's digital currency interest rate, and help break the zero interest rate lower limit
for reference.
7.
It is possible, because when the nominal interest rate is less than the inflation rate, the real interest rate will be negative; In short, the real interest rate is calculated by subtracting the inflation rate from the surface interest rate
that is, the formula is: 1 + nominal interest rate = (1 + real interest rate) * (1 + inflation rate), or the formula can be simplified as nominal interest rate inflation rate (which can be replaced by CPI growth rate). Generally, the interest rate of fixed income procts such as bank deposits and bonds is paid at nominal interest rate
extended data:
the influencing factors of interest rate:
as the price of funds, interest rate is determined and influenced by many and complex factors, and the interest rate level is ultimately determined by the comprehensive influence of various factors. Firstly, the interest rate is affected by the average profit level of the instry, the supply and demand of money and the economic development. Secondly, it is affected by the price level, interest rate control, international economic situation and monetary policy
according to Marx's interest rate theory, interest is a part of profit and a transformation form of surplus value, so interest is first restricted by average profit. Generally speaking, the average profit margin is the highest limit of interest. As the price of capital, interest rate, like ordinary commodities, determines and affects the price of money
the economic development of a country determines the level of enterprise profits and people's income, determines and affects the supply of savings and investment demand, as well as the demand and supply of money
8. Unknown_Error
Hot content