Interpretation of Zhou Xiaochuan’s interview: It may take another 10 years for the central bank to launch digital currency

Caixin Finance Weekly Channel published an interview with Zhou Xiaochuan, the governor of the People's Bank of China, yesterday. The last part of the interview mainly talked about digital currency, revealing the following key information:

1. It may take another 10 years for the People’s Bank of China to launch digital currency.

2. As legal tender, digital currency must be issued by the central bank, and control over monetary sovereignty must be retained. The issuance, circulation and trading of digital currency should follow the idea of ​​integrating traditional currency with digital currency and be managed in accordance with the same principles.

3. The currency generation mechanism and money supply need to be adjusted. The central bank currently issues digital currency mainly to replace physical cash.

4. The issuance and withdrawal of cash is based on the current binary system of "central bank-commercial banking institutions". The issuance and operation of digital currency should still be based on this binary system.

5. Bitcoin does not require a central bank, but for digital currencies controlled by the central bank, a series of technical means, mechanism designs, and laws and regulations will be adopted, which are different from the design concept of Bitcoin from the beginning.

6. Blockchain technology is an optional technology, but so far it still takes up too many resources and cannot cope with the current scale of transactions. Whether this problem can be solved in the future remains to be seen.

To sum up: If the People's Bank of China launches digital currency, it will have nothing to do with Bitcoin, and it may not even use blockchain.

Those students who rush to buy Bitcoin as soon as they hear about the central bank and digital currency should be more careful.