This is a "digital currency" manual prepared for you by four central bank officials

Different from the existing electronic standard currency, technologies such as security chips, mobile payments, trusted and controllable cloud computing, blockchain, and cryptographic algorithms are areas that digital currencies may involve in the future. Therefore, the central bank's digital currency in the future will force the construction of financial infrastructure from multiple aspects, further improve my country's payment system, and further improve payment and settlement efficiency. What is more worth mentioning is that the central bank's digital currency can eventually form a big data system, which will further improve the convenience and transparency of economic transaction activities, which will be conducive to the effective operation and transmission of monetary policy.

First, central bank digital currency can help regulators track the flow of funds when necessary, thereby reducing money laundering, tax evasion, evasion of capital controls and other behaviors. Existing digital currency technology can not only record each transaction, but also track the flow of funds. In stark contrast to private digital currency, regulators can adopt a controllable anonymity mechanism to grasp the use of central bank digital currency, supplement the existing monitoring and control system, and thus enhance the effectiveness of the existing system.

Second, the information advantage of the central bank's digital currency can improve the accuracy of monetary indicators. The big data system formed by the central bank's digital currency is not only conducive to improving the measurability of money circulation velocity, but also conducive to better calculating the total amount of money and analyzing the monetary structure, which will further enrich the monetary indicator system and improve its accuracy.

Third, with the information advantage, regulatory authorities can use policy tools more accurately and flexibly, track the flow of funds, and conduct comprehensive monitoring and financial risk assessment. After the central bank's digital currency is widely accepted and used by the whole society, the transparency of overall economic activities will be greatly improved. Regulatory authorities can collect complete, real-time, and real transaction books of different institutions and frequencies according to different needs, which can provide a huge data foundation for monetary policy and macro-prudential policy.

Fourth, the central bank's digital currency technology can also improve the interest rate transmission of monetary policy. Only the central bank's digital currency that is widely recognized by the whole society can radiate this advantage to different financial market participants, thereby improving the liquidity of funds between different financial markets and the market liquidity of a single financial market. This will lower the interest rate level of the entire financial system, make the interest rate term structure smoother, and make the monetary policy interest rate transmission mechanism smoother.

In summary, the innovation of the central bank's digital currency is to adapt to the development of the situation, keep pace with the times, retain control over monetary sovereignty, and better serve currency issuance and monetary policy, rather than simply replacing paper cash circulation.

As a non-standard financial asset that integrates many financial attributes such as transactions, payments, clearing, and credit, bills have a large market size, many participants, and complex businesses. They are an excellent application scenario for blockchain.

At present, there are three main problems in the bill business: first, the authenticity of the bill. There are counterfeit and forged bills such as fake bills, cloned bills, and criminal bills in the market; second, the immediacy of transfer of funds, that is, after the bill expires, the acceptor fails to transfer the relevant funds to the holder's account in time; third, illegal transactions, that is, the bill trading subjects or intermediary institutions engage in illegal activities such as selling one bill to multiple buyers, list transactions, bridge sales, and leasing accounts.

Correspondingly, there are three main scenarios for blockchain to be used in bills:

First, it can solve the problem of data authenticity on the chain. From the issuance of bills, it is broadcast to all business participants in the entire network. When checking whether the digital bill information has been transferred or tampered with, the blockchain can provide indisputable consistency proof.

Secondly, the distributed structure of blockchain can eliminate information asymmetry, realize the de-intermediation of bill value transfer, and thus eliminate the current chaos of intermediaries in the bill market.

Finally, each digital bill is a piece of business logic code that runs on the blockchain, has an independent life cycle, and is implemented through smart contract programming. This technology can improve the efficiency of bill transactions and reduce regulatory costs. If digital currency is introduced into the bill chain, it can realize automatic real-time DVP and monitor the flow of funds; and by constructing a cash pool hosted by a smart contract, it can also create new business scenarios such as real-time financing.

In the traditional exchange model, exchanges mainly provide two services: information intermediary and credit intermediary. On the digital bill trading platform based on blockchain and smart contracts, because almost all information is stored on the blockchain, the role of the exchange as an information intermediary will be weakened. The blockchain itself is good at solving trust issues. Therefore, in the business system of the blockchain, the exchange is more about providing trading venues, supporting services, and guiding transactions. At the same time, in the process of exchanging private data, the exchange can assume the role of information transfer. The bill exchange is also a maker of trading rules, responsible for offline identity authentication of participants, monitoring transaction behavior on the chain, and updating the smart contract template for issuing bills. For complex transactions, the exchange can assist in analyzing transaction conditions and provide services such as customized smart contracts. In addition, the bill exchange is also the builder and maintainer of the entire bill business platform.

The construction of digital bills with the help of blockchain is essentially to replace the construction method of existing electronic bills and realize the point-to-point transmission of value. If the digital bills constructed by blockchain are still settled in the form of offline physical currency funds, then the advantages that can be generated based on blockchain will be greatly reduced; if digital currency is used in the alliance chain, its programmability itself is substitutable for digital bills, and digital bills can be regarded as digital currencies with elements such as accepting banks, issuers, due dates, and amounts.