Li Wei of the Central Bank: Three Effects and Three Directions of Legal Digital Currency Standard Construction

Recently, Li Wei, deputy chairman of the National Financial Standardization Technical Committee and director of the Science and Technology Department of the People's Bank of China, wrote in the "Tsinghua Financial Review" that legal digital currency is an important infrastructure in the era of digital economy.

To promote the construction of digital financial infrastructure with legal digital currency as the core, it is necessary to give full play to the leading role of standard technical support, interconnection and regulation, and to support the construction of an efficient and stable legal digital currency operating mechanism with a sound standard system to help the development of digital RMB. Zhiyuan.

According to a survey released by the Bank for International Settlements in 2020, more than 80% of the world's central banks are conducting research, experimentation and development of central bank digital currencies, focusing on the design ideas, underlying technologies, application scenarios and impact on the economic and financial systems of legal digital currencies. In-depth discussions on the impact of legal digital currency and other aspects, and actively explore the realization path, specific rules and standards of legal digital currency. As the legal digital currency gradually moves from theory to practice, the development process of international standards in the future is bound to speed up.

In this regard, Li Wei said that my country was an early country that began to study legal digital currency. At the beginning of the research and development of the digital RMB system (DC/EP), the People's Bank of China attached great importance to standard construction and achieved positive results. Mainly manifested in the following aspects:

The People's Bank of China launched a 30 billion yuan reverse repurchase operation today: The People's Bank of China launched a 30 billion yuan reverse repurchase operation today, because 140 billion yuan of reverse repurchase expired today, and a net withdrawal of 110 billion yuan was achieved that day. In addition, 400 billion yuan of MLF expired today. From the full-caliber calculation, the net return of 510 billion yuan was realized in a single day. [2020/11/5 11:41:09]

One is to establish a legal digital currency standard working mechanism. In January 2018, the Gold Standard Committee organized the establishment of a special working group for legal digital currency standards, with the Digital Currency Research Institute of the People's Bank of China as the team leader unit, responsible for the research and compilation of relevant standards, and guaranteeing my country's development of legal digital currency standards from a mechanism. and provide useful reference for relevant international organizations and central banks of other countries.

The second is to initially form a legal digital currency standard framework. On the basis of fully combining the legal digital currency theoretical research and development practice, initially establish a legal digital currency standard system architecture, covering business operations, interconnection, wallets, security, supervision, etc., and effectively enhance the top-level design of the legal digital currency standard work , to provide a solid standard foundation for building a sound and healthy legal digital currency ecosystem.

Central Bank of Russia: It is recommended that non-professional investors invest in crypto for a year with an upper limit of 600,000 rubles: According to news on October 14, the Central Bank of Russia is proposing to set limits on the annual cryptocurrency investment of non-professional investors. The central bank advises that non-professional investors should invest no more than 600,000 Russian rubles ($7,800) a year in digital assets. The official statement states that the new regulatory restrictions will not only concern digital financial assets, but also “other digital rights.” Specifically: the annual purchase of digital financial assets by individuals representing non-professional investors will have a total cap of 600,000 rubles. Unqualified investors who own both digital financial assets and other digital rights are limited to 600,000 rubles for digital financial assets and 600,000 rubles for other digital rights. (Cointelegraph) [2020/10/14]

The third is to actively participate in the process of building international legal digital currency standards. Actively participate in the development of legal digital currency standards under the framework of relevant international standard organizations, play a constructive role in ISO/TC68 digital currency security standards, digital token identification and other working groups, and serve as the vice chairman and chairman of the ITU-T legal digital currency focus group Ecosystem and Reference Architecture Working Group Leader. At the same time, accelerate the integration of my country's legal digital currency standards with international standards, and actively adopt internationally accepted message and data identification standards such as ISO 20022 and Global Legal Entity Identifier (LEI) in the construction of interconnection platforms, in order to improve the efficiency and speed of cross-border payment Connect with relevant financial infrastructure and information systems to provide technical support, and better improve the compatibility and internationalization level of the legal digital currency system and the digital currency system of various relevant institutions.

The central bank conducts a 14-day reverse repurchase operation of 40 billion yuan today: China’s central bank will conduct a 14-day reverse repurchase operation of 40 billion yuan in the open market today. As the 100 billion yuan reverse repurchase expired today, a net withdrawal of 60 billion yuan was achieved on that day. Note: The central bank’s reverse repurchase refers to the trading behavior in which the People’s Bank of China purchases securities from primary dealers and agrees to sell the securities back to primary dealers on a specific date in the future. The purpose is mainly to release liquidity to the market . [2020/9/28]

my country's digital renminbi pilot test is advancing steadily. At present, in addition to the first batch of Shenzhen, Suzhou, Chengdu, Xiong'an, and Beijing Winter Olympics scenes, the digital renminbi has added Shanghai, Changsha, Hainan, Qingdao, Dalian, and Xi'an. a pilot area.

On March 12, the "14th Five-Year Plan for National Economic and Social Development of the People's Republic of China and Outline of Long-term Goals for 2035" was officially released, which mentioned the need to actively participate in international rules and regulations such as data security, digital currency, and digital taxes. Digital technology standard development. Steadily promote the research and development of digital currency. Compared with the "Proposals of the Central Committee of the Communist Party of China on Formulating the Fourteenth Five-Year Plan for National Economic and Social Development and the Long-term Goals for 2035" issued in November last year, the "Proposals" only mentioned the steady promotion of digital currency research and development. In the "Outline of Objectives" officially released this time, an active-zce participation in the formulation of international rules for "digital currency" has been newly added, which shows that the country attaches great importance to the development of digital currency in the international status.

Bank Indonesia mulls ban on bitcoin payments amid fears it could be used to finance terrorism/money laundering: Bank Indonesia has revealed that it is considering new regulations that would ban bitcoin transactions from 2018. Bank Indonesia Governor Onny Widjanarko said yesterday that the bank is seeking an injunction due to concerns that bitcoin could be used to finance terrorism, money laundering and drug trafficking. The central bank, which has the power to determine monetary policy, is currently reviewing whether bitcoin falls under existing e-money rules or deals with cryptocurrencies under a separate framework. "Currently, there is no single regulation for those who use bitcoin for transactions," the governor of Bank Indonesia said, according to the Jakarta Post. No liability for losses. [2017/12/7]

On March 25, 28 ministries and commissions including the National Development and Reform Commission, the People's Bank of China, and the Banking and Insurance Regulatory Commission jointly issued the "Implementation Plan for Accelerating the Cultivation of New Consumption", which emphasized the need to speed up the pilot promotion of digital renminbi, and give priority to some cities with active-zce new consumption for pilot projects , focusing on improving the efficiency of financial operations and reducing financial transaction costs.

On March 26, in order to implement the general requirements of the "Central Committee of the Communist Party of China on Formulating the Fourteenth Five-Year Plan for National Economic and Social Development and the Long-term Goals for 2035" on "steady promotion of digital currency research and development", assisted To build a collaborative innovation research system for legal digital currency, the Digital Currency Research Institute of the Central Bank officially released the "Open Research Project for Legal Digital Currency Innovation (2021)", aiming to build a collaborative innovation research system for legal digital currency and promote the vigorous ecology of the legal digital currency industry develop. Actively participating in the formulation of international rules for "digital currency" and the implementation of application scenarios is obviously one of the goals at the national level.

In the next step, around the construction of legal digital currency standards, Li Wei believes that the following aspects should be done well:

The first is to steadily promote the development of legal digital currency standards. According to the actual needs of legal digital currency research and development, continue to improve the legal digital currency standard system, continuously strengthen and optimize standard supply around business operations, interconnection, security and other fields, give full play to the guiding role of standards, and better support legal digital currency system design and key Technology exploration, research and application. At the same time, further improve the framework of the financial industry standard system, accelerate the construction of basic universal national and industry standards for financial data, information exchange, financial information security protection, and financial technology, and strengthen security chips, fifth-generation mobile communication technology (5G), etc. The innovative research on the combination of technology and legal digital currency provides a good technical standard environment for the research and development of legal digital currency, expands the application scenarios and ecosystem of legal digital currency, and helps the stable development of legal digital currency.

The second is to do a good job of supporting the connection between standards and relevant legal rules. As the legal framework of my country's legal digital currency continues to improve, it is necessary to do a good job in the support and connection of standards and relevant legal rules, to refine the legal digital currency-related laws and regulations, regulatory rules and other institutional arrangements into financial standards, and to unblock the regulatory rules citing financial standards. channel. Strengthen the role of standards in the implementation of laws and regulations and other systems, better support research, testing, pilots, evaluations, and risk prevention related to legal digital currencies. In terms of cross-border payment applications of legal digital currencies, it is necessary to strengthen standards for anti-money laundering, Supported by a series of regulatory requirements such as anti-terrorism financing, anti-tax evasion, and customer information investigation (Know Your Customer, referred to as KYC).

The third is to participate more deeply in the development of international standards for legal digital currencies. Strengthen the follow-up research on international standard organizations such as the International Organization for Standardization (ISO), the International Telecommunication Union (ITU), and international financial organizations such as the Bank for International Settlements (BIS), and participate in the formulation of standards and rules related to legal digital currency in an open and inclusive manner. Strengthen my country's international contribution in relevant standards. On the basis of fully considering the actual needs of our country, learn from and adopt advanced and applicable international standards, improve the level of digital RMB-related infrastructure in line with international standards, improve the ability of business systems to communicate directly with international interbank systems, reduce transaction costs, and improve transaction efficiency. , To facilitate the international application of my country's legal digital currency, and better support the promotion of RMB internationalization.

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