I heard that paper money will disappear. Is it true?

On November 15, the People's Bank of China released a recruitment plan for digital currency research and development talents, and digital currency once again became a hot topic of public opinion. The invisible and intangible digital currency seems to be getting closer and closer to us.
In fact, the central bank started research on digital currency two years ago. In 2014, the central bank set up a special research group on digital currency to demonstrate the feasibility of the central bank issuing legal digital currency. According to reports, the central bank's digital currency research team is currently actively working on key technologies for digital currency, studying the multi-scenario application of digital currency, and striving to launch the central bank's digital currency as soon as possible.
What is digital currency? At present, there is no very accurate definition of digital currency in academia. In a broad sense, digital currency is a kind of electronic currency, which is closely related to network technology, has payment and circulation properties, and can be used as a substitute for paper currency. From a global perspective, "Bitcoin" and other products have some characteristics of digital currency.
So, is the time ripe for my country to launch digital currency at the national level? Will digital currency be launched in the short term? I personally think that although the national level is working on digital currency, it will still take a long time to actually launch digital currency.
First, many monetary authorities in the world are studying digital currencies, but no country has yet issued a digital currency. As a developing country, China has a big gap with developed countries in terms of both technology and institutional environment. I personally do not think it will be the first country to issue a digital currency.

Second, about half of the population in my country still lives in rural areas, where the level of scientific and cultural knowledge is relatively low and their acceptance of emerging electronic things needs to be improved. At the same time, the financial infrastructure in rural areas is poor, and even if digital currency is issued, it will be difficult to apply and promote it.
Third, issuing digital currency also involves financial security issues. Digital currency is related to a country's monetary system and cannot tolerate any mistakes or loopholes. Its launch is bound to be a cautious process.
Therefore, at present, it will take a long time for the country to launch digital currency, and the paper money in our hands will not be affected in the short term. To take a step back, when the digital currency is really implemented, the currency in the hands of residents will not be invalidated out of thin air. Digital currency is just a change in form, and the scale of issuance is still controlled by the central bank. Therefore, the purchasing power of paper money will not be affected in the short term. Just like when India announced the cancellation of large-denomination banknotes of 500 rupees and 1,000 rupees some time ago, it still provided people with a way to exchange small-denomination banknotes. The actual purchasing power of the currency has not changed, and the wealth of residents will not shrink out of thin air. Zhou Xiaochuan, governor of the central bank, once stated that the issuance, circulation and trading of China's digital currency should follow the idea of ​​integrating traditional currency and digital currency, and implement the same principles of management.
From the user's perspective, the digital currency reflected in the user's account is basically the same as the current electronic currency, which is a number representing the amount, but the technology, logic and algorithm behind the digital currency are different. Therefore, there is no need to worry about the security of digital currency. However, from a national perspective, the promotion of digital currency requires special attention to security issues, because once digital currency has loopholes and risks, it is likely to be devastating to a country's monetary system. Even if the technology matures in the future, the issuance of digital currency should be cautious, and risk control and isolation should be done well.

It should be said that if legal and institutional factors are not taken into account, digital currency will likely reduce the cost of currency issuance, circulation, trading, and clearing, improve the convenience and transparency of economic transaction activities, and help the central bank track and manage the flow of currency, and reduce illegal and criminal activities such as money laundering and tax evasion. Therefore, in the long run, digital currency is still a trend in the future development of currency. The central bank is currently studying digital currency in order to take the initiative in currency research and development so as to lead the trend at the right time. This is appropriate and forward-looking.
So, if digital currency is really launched, what impact will it have on traditional banks? I think that if the central bank really launches digital currency, it will at least have an impact on traditional banks in terms of operating costs, business models, organizational structure, etc.:
First of all, after the central bank launches digital currency, traditional commercial banks will be able to reduce their investment in manpower and material resources in currency transportation, currency custody, cash deposit and withdrawal, and at the same time, the cost of inter-bank transfers will also be reduced, and the operating costs of banks will be significantly reduced.
Secondly, with the disappearance of cash, the demand for personal services such as deposits, withdrawals, and foreign exchange will be greatly reduced, and the demand for personal asset management may increase. The existing personal business model is facing adjustments, and bank physical outlets and self-service equipment also need to be transformed and adjusted.
Thirdly, with the introduction of digital currency, traditional banks will have huge demand for technology and related talents, and will pay more attention to the investment and establishment of the technology sector. As a result, the internal organizational structure will undergo major adjustments to adapt to future development and changes.
But no matter what, with the rise of electronic payments and digital currencies, the chances of "counting money until your hands cramp" are becoming fewer and fewer. For the wealthy, facing a series of numbers in their electronic accounts, they may "count money until their eyes are hurt".