The transformation of digital currency by financial institutions
The digital RMB red envelope of 10 million yuan issued by Shenzhen city has brought the development of e-money back to the people's vision
in fact, since April 2020, small-scale pilot projects of digital RMB have been carried out in Shenzhen, Cheng, Suzhou and xiong'an, and the pilot scale will be expanded to 28 provinces and cities in August 2020
as a socially recognized "super outlet", in addition to the high investment of digital currency related enterprises, its impact on the financial market is also of great research value
Policy evolution of the development of digital RMBas early as 2014, the central bank has concted research layout on digital RMB, and discussed the development framework of digital RMB with major international financial institutions and research institutions in the 2016 digital currency seminar
after six years of development, China has initially developed the "pbctfp blockchain platform" and continuously promoted the pilot activities of digital RMB. It can be predicted that as today's technology and policy outlet, digital RMB will have excellent development prospects and extremely fast development speed in the next few years
Figure 1: Policy Evolution of digital RMB
with the improvement of China's national strength, digital RMB provides an opportunity to establish a "new system of RMB cross border settlement", which can promote RMB payment activities around the world and realize the internationalization of RMB
with the development of Internet technology and the profound changes of global payment methods, digital currency with higher operation efficiency and stronger economic adaptability is becoming a new trend of currency development in the future
in this trend, central banks and financial institutions around the world are concting research on currency digitization and related technologies. At the "fintech summit in Shenzhen, China" hosted by Shenzhen Municipal Government on December 20, more than 40 units, including Ping An Group, Weizhong bank and Dacheng Fund, announced that they would jointly initiate the preparation for the establishment of China's Shenzhen fintech digital currency alliance, and cooperate with the central bank and other financial regulatory departments to study and formulate digital currency instry standards and relevant institutional mechanisms
currency digitization is the general trend
in a global science and technology innovation survey released by KPMG, digital currency, 3D printing, Internet of things and biotechnology are listed as the most promising technologies in the next three years. At present, many countries in the world are promoting the research of currency digitization
at the beginning of this year, the Bank of England announced a new research report that the combination of digital currency and mobile technology may completely change the shopping habits of British people, and the Bank of England is considering using this technology to release official digital currency. Sweden's central bank is considering issuing its own digital currency, ekrona, in response to a sharp decline in the country's cash use
in 2014, the Central Bank of China set up a special research group to demonstrate the feasibility of issuing legal digital currency. At the beginning of this year, the central bank held a seminar on digital currency to further clarify the strategic objectives of the central bank in issuing digital currency. In November, the 2017 annual personnel recruitment plan of the printing Science Research Institute, a unit directly under the central bank's official website, showed that six professionals with master's or doctor's degrees would be recruited for digital currency research and development< In an interview with the media a few days ago, Yao / > deputy director of the science and Technology Department of the central bank and head of the preparatory group of the digital currency Research Institute, said that the prototype scheme for the central bank to issue legal digital currency has completed two rounds of revision, and is expected to be tested in relatively closed application scenarios such as the bill market in the future, but there is no clear timetable for the launch of legal digital currency in China<
Third Party Payment institutions may disappear
at the first "China Shenzhen fintech (Financial Technology) summit" held on December 20, the reporter of daily economic news learned that, under the guidance of Shenzhen municipal government, Ping An Group, China Merchants Bank, Weizhong bank More than 40 units, including Dacheng Fund, will jointly initiate the preparation for the establishment of China's Shenzhen fintech digital currency union and fintech Research Institute
according to Yao Yudong, chief economist of Dacheng Fund, the alliance will cooperate with the central bank and other financial regulatory departments to study and formulate the digital currency instry standards and mechanisms. The Research Institute will comprehensively carry out the research on fintech infrastructure and innovative business, and explore and promote the application of big data, cloud computing, artificial intelligence blockchain and other technologies
as one of the sponsors of the alliance, Li Lin, founder and chairman of fire coin, pointed out that when it comes to digital currency, it should be made clear that there is an essential difference between the digitization of legal currency and digital currency. The essence of encrypted digital currency represented by bitcoin is a standardized digital asset. However, because the digitization of legal currency may choose to use the underlying technology of encrypted digital currency blockchain as one of the core implementation technologies, there is a close relationship between the two
Li Lin said that blockchain has outstanding technical advantages in security attributes such as non repeatable transaction, non forgery and non tampering. Digital currency represented by bitcoin has the characteristics of disintermediation, openness, transparency and traceability, which will have a profound impact on the future circulation of sovereign digital currency
"in the global cryptocurrency operation and circulation system, there is a unified and open protocol, and different institutions follow the standard protocol, which provides the basis for the cross platform circulation of currency accounts. There is no need for third-party payment companies to provide services to connect with different banks. " Li Lin gave an example. In his view, in the future, if the sovereign digital currency uses the unified and open blockchain agreement or other agreements, and only provides technical services of cross bank agreement, the third-party payment company will disappear
at the same time, Li Lin pointed out that the structural system of encrypted digital currency under the decentralized structure has brought great problems to government supervision, so there will be some changes in the sovereign digital currency system. For example, anonymity is controllable anonymity, unlike complete anonymity in the bitcoin network.
1. Money supply is obviously affected by financial innovation
(1) the increase of financial innovative procts reces the predictability of money supply. With the increase of financial innovation procts, the level of money becomes more complex, which accelerates the conversion between different levels of money and improves its circulation speed. Therefore, it is necessary to redefine money and its stratification, and clarify the boundaries between the levels of money, especially for the quasi money in circulation, such as the boundary between demand deposits and quasi money, so as to improve the stability of money supply and circulation, Improve the control of the government and the central bank to make them understand the financial data timely and accurately. In real financial innovation, the boundary between current deposit and circulating fund is not clear, and banks and other financial institutions often use it as a settlement or even payment tool. While financial institutions are innovating, the calculation method of their liabilities is not clear. For example, the emergence of a large number of credit cards has led to the increase of financial risks of some banks, but the financial institutions have not been included in the balance sheet. This will easily lead to the inability to distinguish between speculative money and transactional money, and lead to confusion in the division of money supply levels 2) The increase of foreign exchange deposits has changed the structure of money supply. With the opening of national policy, the amount of foreign exchange deposits has increased significantly. At the same time, the advantage of foreign exchange deposit is that it can be exchanged into RMB for circulation at any time, which brings convenience to financial innovation and widens its channels. However, as far as the current laws and regulations on foreign exchange deposits are concerned, they do not belong to the category of monetary statistics, which leads to the change of money supply structure and brings great challenges to the innovation of financial institutions 3) The emergence of bill financing business. Bill financing business is not only the main source of funds for financial institutions, but also an important factor affecting money transmission. It affects the transmission of monetary policy in both money supply and transmission channels. In addition, the negotiability and payment of bill itself can be realized in many ways, such as discount or rediscount. This has a certain impact on China's currency circulation statistics 4) Loan financing business has changed the capital supply structure. In recent years, the banking system has broadened its business scope and expanded its financing scope, such as personal provident fund loan and SME financing loan. However, the deposits generated in this process have not been included in the scope of money supply, which affects the calculation of money supply 5) The issuance of bonds has changed the scope of capital accounting. In the statistics of broad money circulation, the repeated calculation of money supply is often caused by the failure of reasonable statistics. At the same time, for short-term bonds, the financial bonds issued by policy banks to financial institutions with a maturity of less than one year cannot be fully included in the statistics of broad money, which also leads to the repeated calculation of broad money statistics. For enterprises, short-term financing bonds should be regarded as a kind of bank deposit, but according to the existing laws and regulations, it can not be included in the money supply. In short, in the process of bond issuance, the way of capital accounting is not clear, which leads to many inaccurate calculation of monetary capital, repeated calculation and no calculation< The formula of money multiplier is k = DD / b = 1 / (H + R + e + F + P) (DD, B, h, R, e, F and P respectively represent current deposit, base currency, actual withdrawal rate, legal reserve rate, excess reserve rate, excess reserve rate, cash flow rate, etc The formula of money supply is m = k * B (m, K and B represent money supply, money multiplier and base money respectively). Through the formula, we can analyze the specific impact of financial innovation on money multiplier: 1) since financial innovation improves the liquidity of money, the amount of cash holdings is significantly reced, Then the withdrawal rate will decrease, and the monetary multiplier will be enlarged. 2) e to the influence of financial innovation, the withdrawal times and amount of legal deposit reserve will graally decrease, and the legal reserve ratio will decrease, and the monetary multiplier will be enlarged. 3) financial innovation will proce highly liquid financial instruments, which will directly rece the transactional and preventive demand for money, On the contrary, it increases the demand for speculative money, so the money market is an ideal platform for capital replenishment, so there is no need for financial institutions to deposit excess reserves in the Bank of China, which reces the ratio of excess reserves and enlarges the money multiplier. ④ the promotion of financial derivatives makes the currency more liquid and increases the amount of money similar to demand deposits, Therefore, the ratio of fiscal deposits to current deposits and the ratio of postal savings to current deposits will decline, and the monetary multiplier will be enlarged. Both money supply and money multiplier are uncertain, so financial innovation indirectly affects the monetary authority's control over the base money.
The so-called virtualization means that financial institutions increasingly carry out business online through the virtual way of network. Their customers directly obtain various services provided by financial institutions in the office, at home and even on the way to travel. Therefore, financial institutions no longer need a lot of tangible business places and huge fixed asset investment. With the help of Internet technology, new Internet banks are providing financial services to customers through computer networks and terminals
on October 18, 1995, the world's first Internet bank without traditional banking outlets, security first Internet bank, was born in the United States. The total cost of its establishment is only US $1 million, which is only equivalent to the cost of opening a branch of the traditional bank, and its operating cost is far lower than that of the traditional bank. The birth and development of security first network bank marks the beginning of virtual bank and indicates the future development trend of financial institutions. Financial informatization has led to great changes in the operation mode of financial institutions. The wide application of information technology is changing the realization of the basic functions of banks, such as payment and settlement, financing and transfer, risk management, information query and so on. Financial institutions expand the traditional private information network to the public network. The application of e-money, network currency and other digital currency makes the payment and settlement, capital transfer based on cheques and cash tend to be cashless. All kinds of credit cards and digital wallets have been widely used; Real time online network service system can provide customers with full-time, personalized, safe and fast financial services; All kinds of risk management and decision-making systems based on Information Technology (such as automatic credit system, risk integrated measurement system, etc.) are replacing the traditional backward risk management methods, greatly improving the work efficiency and accuracy; The development of new financial procts and services is also accelerating rapidly
to adapt to the change of business mode, the organizational structure of financial institutions is also undergoing profound changes. The organizational form based on the traditional business model of banks, that is, the organizational structure based on branches, has been unable to adapt to the new business model. Around the consumer behavior and demand of customers, traditional banks are carrying out a new structural design and reconstructing their organizational form with the help of information technology. The emerging network bank has completely got rid of the organizational structure of the traditional bank, and can hardly find the structural characteristics of the traditional bank. In short, the role of financial informatization will change from improving the degree of automation of financial business to profound changes in the operation mode and organizational structure of the financial instry