Four principles of digital currency "bookkeeping rules" system

At present, there is a trend of digitalization in the form of currency. It does not happen on the enterprise side, nor does it happen on the bank side, but on the personal side. The establishment of the personal account system in the digital community makes digital payments between individuals possible. The bank is the follow-up party, providing "bank (currency) positions" for the network digital account system. The enterprise side is also a follow-up party, opening up a digital account port to accept digital payments from the personal side, and handing over to banking institutions to receive bank currency. The occurrence and development of personal digital payment is based on the personal account system of the digital community, independent of the bank account system, and cannot follow the existing bank account system, accounting instructions, accounting rules, and bank accounting rules. In this sense, digital payment on the personal side leads to a new form of currency.

However, the digital community personal account system is not suitable for corporate and government departments, that is to say, its public scene is closed, and the digital community personal account system is not connected, or even artificially separated, that is to say , the private scene is separated. This requires the central bank to issue and operate digital legal currency to overcome the shortcomings of digital payment and meet the needs of social and economic digitization.

The Digital Currency Research Institute of the Central Bank and the China Institute of Information and Communications Technology successfully cooperated to establish two international standards for blockchain: On May 11, the 16th Research Group of the International Telecommunication Union held a plenary meeting from April 19, 2021 to April 30, 2021 . At this conference, the Digital Currency Research Institute of the People's Bank of China and the China Academy of Information and Communication Technology cooperated to address the pain points of the blockchain platform's function and performance evaluation, and successfully established two blockchain evaluation projects in the SG16 Distributed Ledger Working Group Q22 Standard "Distributed Ledger Technology Platform Functional Evaluation Method" and "Distributed Ledger Technology Platform Performance Evaluation Method". (Financial Associated Press) [2021/5/11 21:47:29]

News | The International Monetary Fund released a paper "The Rise of Digital Money": On July 15, the International Monetary Fund (IMF) released a paper entitled "The Rise of Digital Money" (The Rise of Digital Money). Written by Tobias Adrian and Tommaso Mancini Griffoli. The abstract of the paper mentions: The paper explains the benefits and risks of stablecoins and highlights the regulatory issues that may arise with the wider adoption of stablecoins. The paper also highlights the risks associated with electronic money (e-money, which the paper interprets as: denominated in and pegged to a currency such as the euro or dollar, storing currency value in electronic form): the possibility of new monopolies threats to consumer protection and financial stability, and the risk of fostering illicit activity. [2019/7/16]

The bookkeeping rule system of digital legal currency will not and cannot copy the bookkeeping rules of commercial banks, and the central bank must establish a new bookkeeping rule system.

News | The Governor of the Central Bank of Mauritius recently stated that a clear distinction must be made between digital assets and central bank digital currency: Yandraduth Googoolye, Governor of the Central Bank of Mauritius, recently stated that financial technology and digital assets are areas that the Central Bank of Mauritius is closely watching. A clear distinction must be made between digital assets and central bank digital currencies: the latter are typically created and issued by central banks and are legal tender, while digital assets are not "legal tender and are not backed by any government or public authority". As a regulator, the Central Bank of Mauritius has a responsibility to ensure that regulated institutions operate safely and securely and in compliance with applicable laws. However, within this framework there is also a strong interest in allowing beneficial innovations to flourish while ensuring that risks are properly managed. It is therefore of paramount importance to ensure that regulatory and supervisory structures are continuously adapted to changing technologies and business models in order for them to remain effective. [2019/3/29]

First of all, the legalization of digital currency must satisfy full-time and real-time payment. This is a demand that cannot be met by the system of bookkeeping rules of commercial banks, and it cannot be achieved. Simply put, the account arrangement of commercial banks cannot meet the basic requirements for the operation of digital currency. There is no overnight problem with digital currency, there is no interval between business hours and non-business hours, it is full-time bookkeeping, and it is real-time bookkeeping, and bookkeeping is done in seconds instead of days.

Secondly, the legalization of digital currency must satisfy all employees and full payment. This is difficult to meet or achieve by commercial bank bookkeeping rules. The so-called inclusive finance refers to the provision of financial services to the greatest extent, and digital finance can afford financial services for all employees in terms of cost. The opening of the digital fiat currency account system is universal and not subject to commercial costs. There will be no "threshold" in the account opening process, and there will be no selective provision of account services. The digital legal currency will realize the point-to-point capital exchange of full real-time payment, without the need for corresponding credit arrangements or difference payments.

Third, the legalization of digital currency must meet the digital accounting needs of the three major economic sectors such as individual households, enterprises, and government agencies. Each private digital payment platform or online digital payment community can only serve individual members in the community, and does not involve corporate departments and government departments. This cannot meet the actual needs of digital economic development, and the participation of all departments must be realized through digital legal currency. In other words, the digital economy requires that digital currency cannot exclude any economic sector and must not exclude any individual or subject.

Fourth, the legalization of digital currency must meet the full coverage of geographical space, eliminate "funds in transit", and realize payment and settlement without distance difference. Digital currency is a product of the digital network community. There has been no so-called "same city" issue since the beginning. Whether you are in a city or a region does not affect the opening of an account. The account system does not differ based on geographical regions. As for the "cross-border" situation, there are two: First, commercial banks that exchange bank currency as digital legal currency believe that there are cross-border problems, including the subject of opening accounts, the flow of funds, and the provision of bank positions. Cross-border issues, in this case, of course, the regulator believes that there are also cross-border issues; second, commercial banks or regulatory authorities do not think that there are cross-border issues, and the network digital account system itself cannot have cross-border issues, but there are always "cross-border issues." Community” situation, as well as exchange transactions between different digital fiat currencies.

In short, the legalization of digital currency aims to fully and thoroughly realize the "full-time, real-time, full-amount, and full-range" currency circulation, and its accounting rule system is still completely beyond the commercial bank monetary system. To cover the scope that can be covered, it is necessary to establish a new system of digital currency bookkeeping rules, and the new form of currency will also take place. Here, the framework for its understanding and analysis focuses on the construction of the theoretical foundation under the new form of currency. (Author: Zhou Ziheng)

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