Digital currency and international financial governance

1.

1. The concept range is different. bitcoin is a kind of digital currency, and the concept of digital currency covers bitcoin

However, some digital currencies have independent issuers

The biggest difference between bitcoin and other virtual currencies is that the total quantity of bitcoin is very limited and it has a strong scarcity. The monetary system used to have no more than 10.5 million in four years, after which the total number will be permanently limited to 21 million

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

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 currencies, such as bitcoin, lettercoin and ppcoin, are electronic currencies created, issued and circulated by means of 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

< H2 > extended data

illegal digital currency

in recent years, "virtual currency" represented by bitcoin, Ethernet currency and Leyte currency has been traded centrally on some Internet platforms. With the help of financial technology, the price of these "currencies" has graally spread to investment, financing and other financial fields, which has aroused wide attention from all walks of life

not long ago, the people's Bank of China and other seven ministries and commissions jointly issued the announcement on preventing the financing risk of token issuance, which clearly regulated the relevant behaviors. Experts pointed out that "virtual currency" is not legal tender (legal currency) issued by monetary authorities, but a specific virtual commodity in essence

therefore, it is undoubtedly a great legal and economic risk to think that "virtual currency" has or will have the nature of legal tender and to carry out speculation, network fund-raising, lending and financing

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. 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.

4. Digital currency exchange brings a lot of influence to the financial circle, because it is very convenient if there is no cash currency in the future.

5. Commonly used are the United States MSB, Estonia, Canada MSB, Australia austrac, which belong to the second category of high cost performance, Bermuda license is not clear, sorry.

6. On January 20, 2016, the people's Bank of China announced on its website that it held a seminar on digital currency. At the meeting, the central bank asked its digital currency research team to "strive for the early launch of the digital currency issued by the central bank". Similarly, central banks such as the Bank of England and the Bank of Canada are planning or considering issuing their own digital currencies. After the advent of bitcoin triggered a wave of private issue and de nationalization of digital currency, the digital currency issued by the central bank seems to have become a global trend

digital currency is a new technology, which is different from the traditional electronic payment tools used by online banking and third-party payment companies. It is developed on the basis of a series of new technologies - they are not tools to transmit money; They are money in themselves. Among them, digital currency based on cryptography is also called cryptocurrency. Bitcoin is a model of this kind of digital currency. After its birth, it inspired many similar systems. Some commercial banks and central banks have also begun to develop their own digital currency. According to the different issuers, we can divide digital currency into three types:
1. Digital currency issued by non-financial institutions

in November 2008, a man named Nakamoto Tsung invented a new technology called blockchain and designed a point-to-point e-cash system, namely bitcoin, for the first time. On January 3, 2009, Nakamoto completed the code development of bitcoin. Due to its point-to-point and electronic nature, bitcoin can be passed directly between two people without the need for a centralized settlement institution. Therefore, it is a fast, low-cost, borderless payment system
2. Digital currency issued by commercial banks

some large international financial institutions have taken a fancy to the low-cost, fast and safe characteristics of digital currency, and began to try to use its underlying technology, namely blockchain technology, to develop their own digital currency. For example, four of the world's largest banks, UBS, Deutsche Bank, Santander bank and New York Mellon bank, are already involved. Their digital currencies are similar to those mentioned above, but their issuers are different. It is particularly noteworthy that financial institutions develop digital currency to meet the needs of their own rapid clearing transactions, rather than challenge the financial situation by replacing the legal currency issued by the central bank. The domestic Puyin group also launched Puyin
3. Digital currency issued by the central bank

some central banks, such as the people's Bank of China and the Bank of England, also plan to launch their own central bank digital currency after some research on digital currency. Technically, CBDC is the same as the above two, but e to its special identity, CBDC will have a greater economic impact, which is the reason why the central bank wants to introce CBDC.

7.

For atoms: the number of electrons and protons is the number of elements. For example, h is element 1, which contains one electron and one proton

The neutron number should know the mass number. If you haven't learned this yet, the mass number can be simply regarded as the relative atomic mass, the number of neutrons = the relative atomic mass minus the number of protons. For example, if O is element 8, it has eight electrons and eight protons. Relative to the atomic mass of 16, the number of neutrons = 16-8 = 8

for ions, protons and neutrons are exactly the same as above, and electrons change, gain more and lose less. The method is similar

the number of electrons outside the nucleus = atomic number = proton number inside the nucleus = nuclear charge number (the number of electrons outside the nucleus of an ion = atomic number (sum) - charge number)

the maximum number of electrons held by each electron layer is 2n ^ 2 (n is the electron layer number). The number of electrons in the outermost layer is not more than 8 (when the k layer is the outermost layer, it is not more than 2). There are no more than 18 electrons in the second outer layer and 32 electrons in the last three layer

the extranuclear electrons are always arranged in the electron layer with the lowest energy first, and then from the inside to the outside, they are arranged in the L layer and then in the m layer. The above four laws are interrelated and cannot be understood in isolation

extended data:

neutrons exist in neutron stars as clusters (neutron stars are one of the few possible endpoints after supernova explosions e to gravitational collapse at the end of star evolution.) In the middle. The neutrons in the solar system mainly exist in all kinds of nuclei, and the neutrons in the elements are very rare β Decay is a change in which the neutron in the element releases an electron to become an element of the previous element sequence

Neutrons can be classified according to their velocities. High energy (high-speed) neutrons have the ability to ionize and penetrate deep into matter. Neutrons are the only ionizing radiation that can make other substances radioactive. This process is called "neutron excitation"“ "Neutron excitation" is widely used in the proction of radioactive materials in medical, academic and instrial fields

High energy neutrons can travel very long distances in air. Neutron radiation needs to be masked by hydrogen rich materials, such as concrete and water. Nuclear reactor is a common neutron source, and water is used as an effective neutron shield

arrangement rule:

1. The electrons are arranged in different layers from the nucleus to the nucleus, and the energy is from low to high

The maximum number of electrons in each layer is 2n2 (n is the number of electron layers)

There are no more than 8 electrons in the outermost layer (no more than 2 in the first layer), no more than 18 electrons in the second outer layer and no more than 32 electrons in the last three layers

In general, the electrons are always in the lowest energy layer, that is, the first layer, when the first layer is full, then the second layer, when the second layer is full, then the third layer

8.

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