Experts: The popularization and promotion of digital currency still faces five major challenges

Source: China Economic Times, Author: Wang Xiaoxia

As an emerging thing, digital currency has received widespread attention from all walks of life in the past two years. Especially recently, the popularity of digital currency has soared, and many places have announced the promotion of digital currency pilot projects. However, judging from the current promotion situation, the full popularization and implementation of digital currency still faces many difficulties.

Promotion still faces multiple challenges

Industry insiders said that at present, the popularization and implementation of digital currency in my country mainly faces multiple challenges such as institutional design, technical security, liquidity, convenience and popularity.

Hao Yi, a researcher at the China Banking Research Institute, said in an interview with a reporter from China Economic Times that the institutional design of my country's digital currency still needs to be explored. Hao Yi said that my country is at the forefront of the world in the practice of legal digital currency. There are no international cases for reference regarding regulatory requirements and risk control standards in the operation of digital currency. The institutional design of digital currency faces the difficulty of starting from scratch and requires a lot of rigorous argumentation.

Ouyang Rihui, deputy director of the China Internet Economy Research Institute of the Central University of Finance and Economics, said in an interview with a reporter from China Economic Times that security of use is the issue that users are most concerned about, such as whether the relevant systems will be attacked by external networks, issues such as user data storage and privacy protection, and anti-counterfeiting and anti-counterfeiting of digital currencies. These issues need to be resolved.

Wei Bei, general manager of the big data division of Beijing Saizhi Times, told China Economic Times that there are still technical security issues in the promotion of digital currency. The central bank's digital currency is based on Internet technology, blockchain technology, etc. The issuance, circulation and withdrawal of currency all rely on distributed accounting technology, but these technologies are still in the early stages of development, and there are still problems such as inconsistent technical standards and poor technical scalability. Large-scale practical applications are needed to ensure the security of the technology.

"At the same time, how to solve the liquidity problem is also the key to whether digital currency can be promoted and popularized." Ouyang Rihui believes that solving the liquidity problem is actually solving the problem of application scenarios. At present, the scenarios of digital currency pilot applications are not very extensive, and the methods are mostly common Internet methods, that is, sending red envelopes. Ouyang Rihui said that at present, offline application scenarios can be gradually expanded through pilots, and how to use online application scenarios in the future is still under exploration.

In terms of convenience, users should have a better experience. Hao Yi said that it takes time for merchants and consumers to accept and get used to using digital currency. Third-party payment tools such as WeChat and Alipay have taken advantage of the scenarios and have already made consumers sticky. Since the strategy adopted by digital currency is to retain the existing financial infrastructure to the maximum extent, this determines that the use scenarios of digital currency have a high degree of overlap with WeChat and Alipay. How to attract consumers to use digital currency will be one of the difficulties facing digital currency.

In terms of popularity, the "digital divide" is also an issue that cannot be ignored. Ouyang Rihui said that on the one hand, smartphones are not yet fully popular in my country; on the other hand, many elderly people are not very good at using smartphones. In the case of the "digital divide", the popularity of digital currency will be restricted, which may also affect the promotion and popularization of digital currency.

Prevent and control risks and help accelerate the development of the digital economy

In addition to the above-mentioned difficulties, what other risks should my country guard against during the development of digital currency?

Hao Yi said that at present, the risks of digital currency are mainly divided into the risks in the promotion stage and the risks in the application process. In the promotion stage, we should pay attention to the fraud scams using digital currency as an excuse. At present, various illegal financial products with blockchain and digital currency as "selling points" are emerging in an endless stream. Taking advantage of the hot spots of digital currency and the lack of relevant professional knowledge among ordinary people, they over-promote technologies such as "blockchain", "decentralization" and "open source code", make up stories and design patterns to attract investors' attention, which needs to attract the attention of regulators.

From the perspective of the financial system, it is more difficult for commercial banks to control the risk of bank runs. After digital currency is widely used, it will be quickly transferred between commercial bank accounts and consumer electronic wallets as a substitute for M0 (cash in circulation). While providing more convenient financial services, it is more difficult for commercial banks to deal with bank runs because the transfer of digital currency from banks is not restricted by time and place. In addition, from the perspective of operating institutions, it brings certain challenges to the risk control and compliance of operating institutions. The loose coupling of digital currency accounts and the partial anonymity they bring bring new challenges to the KYC (know your customer) and anti-money laundering technology of operating institutions.

From the perspective of micro-users, there may be a risk of fraudulent use. Digital currency innovatively implements dual offline payment based on NFC (near field communication technology). The digital currency wallet and the receiver's hardware can complete the transaction by "touching" each other. This may be used by criminals in some "blind spots" of communication signals to exploit signal delays and carry out fraudulent use of digital currency, causing losses to consumers' property.

Industry experts said that the promotion and popularization of digital currency will significantly speed up the movement and circulation of goods, help social operations and stimulate vitality. But at the same time, data security puts forward stricter requirements for the digital transformation of the payment industry, which requires the payment industry to move forward steadily and accelerate progress, seize more commanding heights of digital development as soon as possible, and better help the development of the digital economy.