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Huang Guoping, Academy of Social Sciences: The digital renminbi came into being



Introduction The digital renminbi will not only help improve the digitization level of China's existing financial payment system and enhance the level of financial services for the real economy, but will also profoundly affect the development of my country's monetary policy, financial market and financial inclusion. At present, the issuance and implementation of digital renminbi is accelerating. The digital renminbi (DC/EP) project is inconsistent with the so-called pure CBDC standards and principles in the United States and Europe in terms of design concept and program selection. It is essentially a synthetic CBDC (synthetic Central Bank Digital Currency, sCBDC). Based on China's national conditions and the status quo of financial development, compatible with existing technologies and management systems, the digital RMB system adopts a two-tier architecture system of dynamic competition and multiple programs in terms of technology and operational design. Participants currently mainly include commercial banks, telecom operators (such as China Telecom, China Unicom, China Mobile, etc.), Internet e-commerce and payment platforms (such as Ant Financial, Tencent WeChat Pay,, Suning, etc.) and other BigTech platform companies , to achieve mutual coordination and win-win cooperation.  Participants in the second layer of digital renminbi have a strong financial technology level, and at the same time have a strong motivation to seize the development opportunity of digital renminbi to promote their own development. This is also the key to the dynamic evolution of digital renminbi adopting a two-tier structure system in terms of technology and operation: First, it can make full use of commercial banks and Internet platforms and other talents, technology and market advantages to integrate resources and promote innovation. Under the circumstances, realize joint development and joint operation, and improve the trust of digital renminbi; secondly, it helps to disperse and resolve various risks such as technology, capital and market, and avoid risk concentration; thirdly, the two-tier structure helps to avoid the possibility of financial disintermediation. The adverse impact on commercial banks will improve the stable operation of the current financial and monetary system, so as to realize the integration and coordinated development of finance and technology.  Development advantages of digital renminbi Digital renminbi came into being, and its development motivation is multi-faceted and multi-level, including demand and supply factors, following the pace of financial regulatory reform, and effectively hedging against the disorderly development of private currencies; In the current turbulent international political and economic environment, it is an important means to deal with the current complex and changeable international political, economic and financial environment, and to promote and ensure the smooth progress of RMB internationalization and RMB cross-border payment.  Researcher of the Chinese Academy of Social Sciences: Using blockchain technology to assist small and medium-sized enterprises in financing: Lin Pan, an associate researcher at the Institute of Economics of the Chinese Academy of Social Sciences, wrote that in special times, state-owned enterprises or well-known private enterprises can be encouraged to play a leading role and actively adopt blockchain It solves the problems of privacy protection and data rights confirmation in the process of information sharing, increases the credit of related small and medium-sized enterprises, and assists in financing. The government should also further strengthen cooperation with enterprises, industry organizations, and industrial parks, and build an ecosystem in which the government, enterprises, banks, and insurance companies jointly respond to the epidemic and promote the development of small and medium-sized enterprises, so as to seek a win-win situation for all parties and overcome difficulties together. (Guangming Daily) [2020/3/19] In terms of demand, the birth of digital RMB (digital payment) is not only the result of the vigorous development of the digital economy represented by e-commerce platforms, but also reflects the objective demands of the digital economy to seek breakthroughs in the currency field .  In terms of supply, the digital RMB is an important strategic link for financial technology to promote the digital transformation of the financial system and the precision of monetary accounting in the cash field. In the two-tier technical operation structure of the digital renminbi (DC/EP) project dynamic competition and multi-solution solutions.  In terms of financial supervision, after the comprehensive promotion of the digital RMB retail terminal pilot, it will become the core financial infrastructure carrying transaction data and information, and will also provide basic data such as consumer finance and anti-money laundering supervision for regulatory authorities. At the same time, the issuance of digital renminbi will help alleviate the risk of disorderly development of the private digital currency market and improve the stability of the financial system. Due to the controllable anonymity of the digital renminbi in design, all kinds of illegal financial behaviors can be banned in time or the source of financial violations can be found through traceability methods to ensure the stable development of the financial and economic system. The digital renminbi partially replaces the circulation and transaction of private digital currency, which not only alleviates the pressure of financial supervision in the digital economy environment, but also prevents the risk of excessive financial innovation and prevents excessive speculation.  In terms of RMB internationalization and RMB cross-border payment, the digital RMB can not only become an international financial infrastructure to promote RMB internationalization and financial globalization, but also help relevant countries avoid international payments and settlements controlled by the United States and Europe. It is possible for the system to implement unreasonable monitoring and long-arm jurisdiction over international economic and financial activities. With the emergence of digital currency (including legal digital currency and private digital currency), the new digital financial infrastructure centered on digital currency may weaken the strength and dominance of the US dollar in the international monetary and financial system, providing impetus for the internationalization of the RMB and opportunity.  Voice| Yin Zhentao, Academy of Social Sciences: Legal digital currency can reduce the cost incurred in the use of banknotes: Golden Finance reported that Yin Zhentao, deputy director of the Law and Finance Research Office of the Institute of Finance, Chinese Academy of Social Sciences, believes that legal digital currency can be used to a large extent Reduce the cost incurred in the use of banknotes. At present, with the improvement of counterfeiting technology for physical currency, identification and anti-counterfeiting technology also needs to be continuously improved, and relatively more funds have been invested in this area. Legal digital currency can reduce such costs, and the traceability of legal digital currency can also guarantee the security of people's transaction funds to a certain extent. Yin Zhentao added: "Our country's practice or discussion of legal digital currency, including the mass base and technical capabilities in the promotion of legal digital currency, is at the forefront of the world." [2019/12/4] Development, the continuous improvement of national income and living standards, as well as the objective needs of economic and financial structure upgrading and digital transformation, are the most solid foundation and guarantee for promoting the development of digital renminbi. In the current pilot stage, it can be seen that the development of digital renminbi has significant advantages in terms of system guarantee, scene implementation and development path.  Institutional guarantee advantages. Fundamentally different from the current international monetary and financial system dominated by the U.S. dollar that represents the interests of global private capital, the basic system of Chinese society determines that China’s monetary and financial system represents the interests of the public and society, which is the most important institutional guarantee for promoting the development of digital renminbi . The People's Bank of China began research and development of digital renminbi as early as 2014, and at the same time decisively decided on the design of digital renminbi, first choosing a retail central bank digital currency with greater potential benefits to society and the public. This is conducive to improving the efficiency of monetary and financial services, expanding the scope of financial services, and better promoting financial inclusion and inclusiveness; at the same time, the central bank will strengthen its ability to control the monetary system and better achieve financial stability. On the basis of adhering to the leadership of the public sector and safeguarding national currency sovereignty, the digital renminbi will take the digitization of the renminbi as an opportunity and starting point, actively participate in the digital transformation and upgrading of the global financial and monetary system, promote the internationalization of the renminbi, and achieve a win-win situation for cooperation.  Inertia and scene advantages. Since 2020, the People's Bank of China has successively launched digital renminbi pilots and tests in Shenzhen, Suzhou, Xiong'an New District, Chengdu and the Winter Olympics scene. In August 2020, the Ministry of Commerce of China issued the "Notice on Printing and Distributing the Overall Plan for Comprehensively Deepening the Pilot Program of Innovation and Development of Trade in Services", clearly proposing to carry out digital RMB pilot programs in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, and the central and western regions where conditions permit. . As of the end of August 2020, the digital renminbi has been implemented in more than 6,700 pilot scenarios across the country, covering life payment, catering services, transportation, shopping, government services and other fields. The accelerated advancement of digital renminbi has consolidated the inertia and scene advantages of my country's legal digital currency. Over the years, the development of third-party payments such as Alipay and WeChat Pay has cultivated the non-cash payment habits of Chinese residents, and residents have become accustomed to this convenient payment method without cash. In 2019, my country's mobile payment accounted for more than 60% of personal consumption expenditures. In 2020, the number of mobile payment users in my country will account for nearly 60% of the total population. At present, the People's Bank of China is further expanding application scenarios such as cross-border, cross-institutional payment and clearing/settlement, giving full play to the advantages of large technology companies in many scenarios.  Voice| Shanghai Academy of Social Sciences Dai Lina: Attention should be paid to the new challenges of the public opinion environment brought about by the development of new technologies such as blockchain: According to The Paper, Dai Lina, deputy director of the Institute of Journalism, Shanghai Academy of Social Sciences, said recently that the current global cyberspace Information dissemination is mixed, and information manipulation is not uncommon. Information technology is a "double-edged sword". We must make full use of the development of information dissemination methods to "undertake the mission of raising the banner, gathering people's hearts, cultivating new people, invigorating culture, and developing the image." At the same time, we also need to pay attention to and guard against 5G New challenges in the public opinion environment brought about by the development of new technologies such as , big data, artificial intelligence, virtual reality, and blockchain. [2018/8/28] Advantages of technical fault tolerance. In the two-tier structure of the digital renminbi system, there are many types and numbers of second-tier participants in the development of digital renminbi, including traditional financial institutions such as commercial banks, information and telecommunications service providers, and various pioneers of non-cash payment services. e-commerce platform. The digital renminbi adopts a dynamic, competitive, and multi-plan two-tier technology and management system, which takes advantage of China's competitive and fault-tolerant advantages as a major country, so as to avoid failures caused by wrong technology choices and cause major impacts on the financial and monetary systems. China has a large population and a large market. The digital renminbi can accommodate a variety of technical solutions under the two-tier structure. It adopts multiple solutions for parallel development and pilot projects, and implements a competitive and dynamic evolution mechanism for the survival of the fittest, which can not only ensure the financial system and the financial ecological environment. Stable development can also promote the continuous innovation and improvement of technology in the process of competitive evolution, so as to avoid monopoly hindering financial innovation and new technology development.  The development of digital renminbi still faces challenges The planning of digital renminbi is early and the progress is fast, and it has formed a certain first-mover advantage. As the digital renminbi enters the public eye and social life, it is bound to further improve the ability of financial services to serve the real economy and expand financial inclusion. At the same time, it will also help the RMB to break through physical and geographical boundaries, improve the accessibility of RMB, and promote the process of RMB internationalization. Of course, as the influence and penetration of the digital renminbi continue to expand, various challenges and constraints at home and abroad will inevitably be encountered in the development process.  From a domestic perspective, the development of digital renminbi still faces market, institutional and technological constraints Lei Zhao, Chinese Academy of Social Sciences: Judging from the operating mechanism and actual effects, Bitcoin is not a Ponzi scheme: From the perspective of mechanism and actual effect, Bitcoin is not a Ponzi scheme for the following reasons: First, the rules and operating mechanism of the Bitcoin system are open and transparent. All information in the Bitcoin system is true and reliable, and no one can manipulate it; second, the acquisition of Bitcoin requires a real economic cost; third, Bitcoin has a high use value, and its value depends on market demand. Through Bitcoin, a digital currency that exists in cyberspace, people can easily complete the payment behavior of "online" transactions. At present, physical stores in many countries and regions have begun to accept Bitcoin; fourthly, Bitcoin has contributed a very high-value underlying technology to the society - Blockchain (Blockchain), which is to reconstruct the credit system in various fields of society. It provides technical possibilities and has broad application prospects. [2018/5/4] The development of digital renminbi may impact the current financial structure and interest pattern. Although the digital renminbi tries to be compatible with the existing financial system in terms of design and avoid major adjustments in the structure and interests, the impact on commercial banks and payment institutions may be inevitable in the short term. For example: digital renminbi may lead to "deposit relocation", which will damage the interests of commercial banks to a certain extent; digital renminbi, as an emerging payment tool, may infringe the interests of existing third-party payment institutions in the short term. Therefore, the smooth issuance of digital renminbi requires good communication and coordination with current stakeholders.  The development of digital renminbi may exacerbate the complexity of monetary policy implementation. For example, the digital renminbi will increase the sensitivity of monetary policy and the liquidity of financial assets, reduce the cost of conversion between various assets and currencies and the stability of demand deposits in bank funding sources. The increase in the proportion of funds will deteriorate the bank's balance sheet and increase the cost of debt. To this end, we need to make scientific and prudent policy and system decisions, obtain reliable data and information during testing and piloting, conduct stress testing and simulation evaluations based on this, and formulate contingency plans for policy measures to deal with unexpected events.  The development of digital renminbi may expand the boundaries of financial supervision and increase the difficulty of supervision. For example, the digital renminbi will help to improve the opportunity and strength of the renminbi as an anchor currency for private digital currencies in the international financial market, and enhance the international status of the renminbi; but objectively, it may also increase the risk of domestic financial markets due to the introduction of international financial market and system risks. Regulatory difficulty and complexity. For another example, the digital renminbi may be technically more convenient to break through the current foreign exchange management restrictions and policies, and realize the free exchange between the renminbi and various currencies (including legal and private digital currencies); but it may also distort the formation mechanism of the renminbi exchange rate, Increase the exchange rate risk and the difficulty of foreign exchange management. Under the premise of adhering to the principle of prudence, regulators can implement moderately flexible digital currency regulatory policies, and build a digital currency regulatory system with Chinese characteristics through innovative means such as regulatory technology and regulatory sandboxes.   Jinse Finance live report Wang Binsheng, Ph.D. Distinguished Professor of the Chinese Academy of Social Sciences: To a certain extent, the block chain is a movement of inclusive "diaosi": Jinse Finance live report, at the 2018 World Blockchain Conference held on April 3 At the blockchain summit, Wang Binsheng, a doctoral distinguished professor of the Chinese Academy of Social Sciences, said, why is the blockchain an inclusive movement? Pratt & Whitney Who? Is it an inclusive social elite? Pratt & Whitney is "Diaosi", because "Diaosi" had no chance before. The core behind the blockchain is to gradually remove the advantages obtained due to information advantages and non-personal reasons. Of course, from the perspective of elitism and sociobiology, we must objectively admit that people are different from each other. The future also exists forever. Moreover, as the cost of information transmission becomes lower and lower, the gap between rich and poor due to individual differences may become larger and larger. [2018/4/3] The development of digital renminbi has increased the technical risk of the financial system. Digital currency is still in the early stage of development, and many technologies are immature in theory and practice, and have not yet been confirmed by large-scale applications. This is also a factor that must be taken seriously and fully considered during the official issuance and implementation of digital renminbi.


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