People's Daily: New technologies lead the evolution of digital currency, and good money drives out bad money

Recently, the impact of electronic payment technology has begun to attract more attention. Among many events, Apple's Apple Pay mobile payment service officially landed in the domestic market, and the People's Bank of China held a digital currency seminar. With the rapid development of technology, the boundaries of "currency" have become increasingly blurred. To clarify what digital currency is, we need to start with the concept of electronic currency.

According to the Basel Committee on Banking Supervision, electronic money refers to a stored value or prepayment mechanism that is used to complete payments through direct transfers through sales terminals and devices, or through computer networks. As early as 1996, the Bank for International Settlements conducted a series of studies, arguing that electronic money may affect the monetary policy of central banks, such as affecting the relationship between the interest rates controlled by the central bank and the main market interest rates.

To further sort out the development of electronic money, we need to look at the ultimate credit support behind the currency. The most typical one is the credit support of legal electronic money. Traditional electronic payment innovations represented by credit cards and the emergence of electronic wallets of financial institutions actually belong to changes in the form and embodiment of money, but they still do not jump out of the direct or indirect coverage of the central bank's credit. Second, with the development of e-commerce, more and more non-bank institutions are involved in the provision of electronic payment tools, and some institutions are actually issuing electronic money of non-bank credit. Third, in the 1980s, a group of foreign experts began to study the network payment system based on specific cryptography, and explored anonymous cryptocurrencies. Bitcoin, which was born in 2009, is one of them. But this kind of currency has various defects to a greater or lesser extent.

In general, digital currency in the strict sense belongs to the last type. Its characteristics are that it begins to rely more on distributed rules and intelligent codes for issuance and operation, and its credit support is getting further and further away from the centralized mechanism of the central bank. Its scale is still small and its technology is still in the improvement stage, but it may have a significant impact on the existing monetary mechanism in the future.

Therefore, when we talk about digital currency, one emphasizes the new type of electronic currency, which can use encryption technology to be independent of the central bank, issued and verify the validity of payments in accordance with specific protocols; the other is to further optimize the existing typical model of electronic currency, so as to introduce new technical support such as giving currency smart codes, while maintaining the central bank's moderate control over the operation of currency. In fact, this challenge is also global. At present, not only central banks of various countries pay more attention to how to face the challenges of digital currency, but the International Monetary Fund has also specially organized research on digital currency and issued a report.

From cash to non-cash payment, from traditional card-based electronic payment to network-based electronic payment, from simple electronic form payment to smart code payment, from the level of payment tools to the level of currency, it should be said that new technologies are constantly changing the monetary and financial system. Ultimately, it is possible to bring higher transaction efficiency, lower costs, more accurate policy implementation, more effective anti-money laundering and other risk controls, thus profoundly changing people's lives and the global monetary system. Of course, the realization of these goals still requires a lot of research and exploration, professional popularization and public education, so as to "crowd out" lawbreakers, speculators and industry "bad money" in the field of digital currency.