The central bank’s official microblog published two articles discussing the details of digital currency

Since the People's Bank of China established a special research group on legal digital currency in 2014, the research on central bank digital currency (DC/EP) has been going on for five years. In the past two months, the discussion on the topic of central bank digital currency has gone from warming up to being paid attention to and then to heated discussion.

Facebook unveiled its digital currency project Libra on June 18 this year. Although it is still unknown whether Libra can be truly implemented, its vision of promoting cross-border capital flows around the world has attracted close attention from many governments and financial regulators around the world. Taking this as an opportunity, digital currency research at the national level is likely to enter the fast lane of development again.

On August 21, the overseas edition of the People's Daily published an article titled "The True Face of the 'Digital RMB' Revealed", which said that the central bank's launch of digital currency "is neither the currently popular e-wallet or online payment, nor a complete 'replacement' to replace the existing RMB system, but a new encrypted electronic currency system that has a certain degree of alternative to circulating cash."

Also on August 21, the official WeChat account of the central bank updated two articles, reorganizing and publishing the original text of the article "Some Considerations on the Central Bank's Digital Currency" published by Fan Yifei, Deputy Governor of the Central Bank, in January 2018, and the important speech by Mu Changchun, Deputy Director of the Payment Department, at the Third China Finance 40 Yichun Forum on August 10, 2019, as the headline and second article respectively.

The contents of these two articles by the central bank were published more than a year apart. Overall, they did not deviate from the core design of the previous "two-tier operating system."

However, on this basis, in addition to the refinement of the nature and design of digital currency, Mu Changchun's statement that the central bank's digital currency is "about to be released" further released the signal that the regulatory level will accelerate the development of digital currency and promote the implementation of the central bank's digital currency. On the 2nd of this month, the People's Bank of China has clearly pointed out in the video conference on the work in the second half of 2019 that it is necessary to accelerate the pace of research and development of my country's legal digital currency (DC/EP), track and study the development trends of virtual currencies at home and abroad, and continue to strengthen the rectification of Internet financial risks. According to what Mu Changchun said later, after determining the basic design framework and operating system, the development of the central bank's digital currency has entered a "horse racing" state. Several designated operating institutions are conducting research and development of DC/EP according to different technical routes and competing for the development of the central bank's digital currency.

Moreover, the discussion will not only focus on the development of the central bank's digital currency itself. The continuous interpretation, discussion and analysis of similar or similar products and technologies will also gradually clarify the public's understanding of many details such as the design difficulty, technology selection, and development progress of the central bank's digital currency.

For example, it is worth noting that although the central bank’s digital currency has been in the process of continuous advancement, the necessity of launching the central bank’s digital currency is not clear to the public due to China’s current leading edge in third-party payments. In addition, the development of cryptocurrency and blockchain technology that we are familiar with is far from reaching the level of impacting the traditional financial market. For the public, the conceptual boundary between the central bank’s digital currency, which has not yet been launched, and the most commonly used electronic mobile payment is often vague.

Although the release of Libra by international technology giant Facebook is too advanced for current financial regulation and difficult to be launched immediately, its forward-looking nature in the field of cross-border payments still poses a certain challenge to traditional finance. Therefore, as related financial products and technologies including Libra become more mature, the research progress of central bank digital currency has been promoted to a certain extent.

Author: Xi Xixi

Source: Caijing.com Chain Finance