Central bank digital currency anti money laundering

1.

The digital currency of the central bank is DCEP

the name of the digital currency developed by the central bank is DCEP (digital currency electronic payment). DC is digital currency. EP is electronic payment. Payment transmits digital things through a certain way, not paper currency. Therefore, electronic payment itself has the attribute of digital currency

The characteristics of digital currency are: low transaction cost; Fast trading speed; Highly anonymous

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Application of digital currency

I. fast, economic and safe payment and settlement

cross border payment helps RMB internationalization. In 2015, the settlement volume of cross-border payment involving current account is about 8 trillion yuan. To accelerate the internationalization of RMB, cross-border payment and settlement procts and solutions with low cost, high efficiency and low risk are needed

At present, there are still a lot of repetitive human work in the bank's electronic loan process and processing process, and as the basic support of loan issuance, many of the collateral has the situation of false pricing or multiple or even no collateral. We can consider using digital currency to price and track bank collateral:

3. Bill finance and supply chain finance

in recent years, various bill market businesses based on commercial bills have grown rapidly, and bill financing procts have become a hot area of Internet financing. However, about 70% of the current bill businesses in China are still paper transactions, Supply chain finance is also highly dependent on labor costs

reference materials

network digital currency

2. The central bank is about to issue its own digital currency CBDC

3. The people's Bank of China has designed a two-tier architecture for digital currency
specifically, according to Yao Qian, director of China digital currency Research Institute, the design framework of central bank's digital currency is mainly convenient and efficient, safe and controllable, and popular development
as for the two-tier framework, the two-tier framework is the central bank and the commercial bank, based on the account and wallet. This framework is to combine the original bank account system with the account system based on digital currency wallet
in blockchain technology, digital currency is separated from legal currency system and bank account system. Otherwise, together, it will cause chaos. Considering this problem, Yao Qian introced digital currency wallet into the account system of commercial banks. In this way, an account can manage both electronic currency and digital currency. Of course, this kind of design has a great impact on the current banking system, but it is also a resource for commercial banks with mature system
how does digital currency wallet work in commercial banks
bank accounts and digital currency wallets of commercial banks have common management features. In this case, bank accounts and digital wallets have different positioning. According to the wallet standard designed by the central bank, a wallet is equal to a safe deposit box. According to the requirements of customers, the bank will manage the safe deposit box as all the properties of cryptocurrency. This framework adds a Digital Wallet ID field to the bank account. In this way, the wallet has the function of a safe deposit box and does not participate in the business, so as to avoid affecting the core business of the bank
digital currency transfer can be directly transferred in the commercial banking system, or through the note issuing bank using the client-side digital wallet, direct point-to-point transactions, so that there is no need to rely on inter-bank payment between account banks< In a word, digital currency wallet is the personal wallet in the commercial banking system
theoretically, the payment system deals with demand deposits, while digital currency is in the category of cash
is the digital currency issued by the central bank decentralized
Yao Qian said that the biggest issue facing the instry now is whether decentralized distributed ledger should be used at the top level
Central Bank digital currency is more convenient and can develop into controllable anonymity through centralized issuance and account based weak association. However, in the digital world, we cannot confuse the economy and finance behind the numbers. Although they are all numbers, they represent different assets, so the central bank will keep them in mind when designing. We want to have a mature financial infrastructure for legal digital currency, but considering that the note issuing bank is only responsible for the digital currency itself, and the account bank is responsible for the actual management business, so as long as the specific application is implemented, the note issuing bank and the account bank will perform their ties and do their best
then the characteristics of the central bank's digital currency are
1. Digital currency, like RMB, has stable value
2. The operation mode is the same as RMB, which is endorsed by the national credit and issued by the central bank, and all commercial banks exchange it into the market
3. Digital currency issuance relies on big data, because it has the possibility of real-time collection of currency bookkeeping, flow, transaction, etc., which can provide help in anti money laundering
4. After digital currency replaces paper currency, it will play a positive role in preventing counterfeit banknotes, changing change, and preventing damage and loss ring transaction storage
5. It will rece the waste of resources. The proction and printing of paper money need cost, while the proction of digital currency depends on big data, so it will rece the waste of resources
therefore, with the advent of the central bank's digital currency, personal participation will have less opportunities to make money
I hope it can help you
hope to adopt it

4. On the issue of issuing their own digital currency, central banks are always less thunderous. Central banks around the world are considering issuing their own digital currencies to compete with cryptocurrencies such as bitcoin, but they have been unable to do so for a long time

the media's attention to the central bank's digital currency has increased significantly, especially after Zuckerberg testified in Congress on the Libra issue and Christina Lagarde acknowledged the "clear demand" for stable currency at her first media reception as president of the European Central Bank, which seems to have changed the public's view on this matter, Let many people in cryptocurrency community think that cbdcs is in sight<

according to the latest survey report released by the bank for International Settlements, central banks in the past seven years have been investigating this technology and assessing its impact. Of the 63 central banks surveyed, 55 said they were unlikely to issue cbdcs in the next three years, and only one reported that they were "highly likely to issue large-scale cbdcs in the next three to six years."

although the proportion of central banks studying cbdcs is very high, the crux of the problem is that it is mainly theoretical and investigative work. Only five central banks have concted more in-depth research and real project development or experimentation - but that still does not mean that they will necessarily issue cbdcs

through close observation, it is more and more obvious that both Libra recently released by Facebook and the new stable currency assets have had a significant impact on the central bank. Today's situation took hundreds of years to form, but it changed in a few months; Competition, the most terrifying and unfamiliar concept that has never been thought of before and penetrated into the elite society of central banks, is now knocking at the door

it can be said that the solution to the current situation is still unclear. Some people who are familiar with these things even say that they are bluffing. However, in Lagarde's own words, the slow and wait-and-see regulatory approach can no longer meet the needs

1. What is central bank digital currency<

what is the difference between central bank digital currency CBDC and other digital currencies

CBDC is a new form of currency, which is directly issued by the central bank in digital form as legal tender. The current form of legal currency is cash, reserve deposit or balance settlement< There are two main differences between CBDC and other digital currencies (including cryptocurrency and other forms of central bank currency):

1. CBDC has nothing to do with cryptoassets. They're not decentralized, they don't have to be blockchain based, and they're certainly not anonymous, they're not unlicensed, they're not censored< 2. Contrary to the current digital cash, the operation structure of CBDC will be different from other forms of central bank currency. CBDC has more powerful functions. They are programmable, can generate interest, can be cleared in near real time, and have cheaper handling charges and wider openness

when designing CBDC, the speed of central banks is different. Different central banks adopt their own approach. However, in general, there are three problems being explored: whether CBDC should be based on token or account number, whether CBDC should be batch (only open to banks) or retail (open to the public), and whether it should be based on DLT

when CBDC is to be implemented, things will become complicated, and there are many thorny problems to be considered

for example, once CBDC is launched, does it need to cancel cash? Should CBDC carry interest? Should they have face value like cash? Or linked to the total price index? What impact will this have on commercial banks? What about anonymity and privacy? All these questions need to be answered<

2. Motivation for issuing CBDC

in the 2017 staff discussion paper, the Bank of Canada gave six reasons for issuing CBDC in an article entitled "central bank digital currency: motivation and impact":

1. Ensure that the central bank provides sufficient cash to the public, and maintain the seigniorage revenue of the central bank

2, Support non-traditional monetary policy

3. Rece overall risk and improve financial stability

4. Improve payment competitiveness

5. Promote financial inclusiveness

6. Curb criminal activities

looking back at the bank for International Settlements survey we analyzed earlier, payment security and domestic efficiency are selected as the most important motives of the central bank. According to a large number of papers published by the central bank and other large financial institutions, for developed countries, the transformation into a cashless society is the main driving factor, while for developing countries, financial inclusiveness, cost rection and operational efficiency are the main motivation

throughout the rest of the reports and the literature that can be found, the fierce competition brought about by bitcoin and other innovations in the cryptocurrency instry, as well as the clear need for "one step ahead", of course, are not listed as the reasons for issuing CBDC< The advantages and potential risks of CBDC are very low.

if the central bank starts to launch CBDC and succeeds in the end, there are many potential benefits

from a technical point of view, CBDC is much better than the current form of legal currency. They can be tracked better, collect taxes more conveniently, transmit monetary policy better, have better financial inclusiveness, and rece the cost of procing physical currency

the most obvious advantage is that payment is cheaper and faster, whether it is domestic payment or cross-border payment

in addition to the design and implementation problems, a key problem of issuing CBDC is that CBDC may increase the risk of bank operation. However, this only happens when banks promise that their deposits can be converted into CBDC on demand, which is not necessarily the case, according to the Bank of England document

4. Facts on the ground

how far is it from us to see a real CBDC appear in the market? It's hard to estimate, but at present, we can sum up the current situation in one sentence: all talk but no practice

if we put aside the failed digital currencies of Ecuador, Tunisia and Venezuela, we can only do theoretical research, a small amount of experiments, and issue some feasible CBDC issuance announcements supported by the state in the future

the most famous CBDC projects in progress are: e-peso in Uruguay (the project was successfully tested in 2018), DCEP in China, "project Inthanon" in Thailand, e-krona in Sweden (still in the research stage)...

5. The revolution has not yet been successful, and comrades still need to work hard

considering the factors mentioned above, Most of the headlines about CBDC's upcoming release are groundless. All projects scheled to be released this year have been delayed

in fact, there is still a long way to go for the birth of CBDC, and to convince the public, we need more than a statement. Given the current situation, it seems that CBDC and other cryptocurrencies may not affect each other - at least for now.

5. There are a lot of them. Go to the regular exchange, such as bitbuffer, fire coin, coin security, etc.

6. Should be to see the digital coins in the future market prospects, so at this stage to seize the market!

8. The experience of various countries shows that money laundering has serious harm to society. First, in countries where money laundering is rampant, the reputation of the government is bound to be affected, which seriously threatens social stability; Second, money laundering distorts the allocation of social resources and disturbs the normal order of market economy; Third, money laundering seriously damages social equity and encourages and breeds corruption
needless to say, as a developing country, there is still a certain gap between China's anti money laundering work and the international standards, which is mainly reflected in the following aspects: first, the anti money laundering laws and regulations are not perfect, the existing anti money laundering laws and regulations are scattered in dozens of laws and regulations, which are not yet systematic, and there is still a lack of a special anti money laundering law, In particular, the existing anti money laundering law defines the upstream crime of money laundering too narrowly, which limits the extensive development of anti money laundering work. Second, the division of responsibilities among departments related to anti money laundering is not clear enough, and the cooperation mechanism needs to be improved. Money laundering crime has the complex characteristics of cross instry and cross region, which determines that the anti money laundering work can not be competent only by one department. It is necessary to carry out multi department cooperation. If we fight separately, it is difficult to form sufficient joint force to prevent and combat money laundering crime. Third, the anti money laundering monitoring and analysis system needs to be improved. At present, the reporting channels of large amount and suspicious capital transactions are separated from domestic and foreign currencies. If they are not unified as soon as possible, it is difficult to improve the level of monitoring and analysis; The way of transaction report and analysis method are relatively backward, and the electronic level should be improved as soon as possible; Some financial institutions and non-financial institutions that are vulnerable to the threat of money laundering have not been included in the scope of anti money laundering transaction reporting, so it is necessary to expand the scope of transaction reporting as soon as possible through the introction of relevant laws and regulations. Fourth, the internal control system of anti money laundering is relatively weak. Some financial institutions lack sufficient knowledge and understanding of the threat of money laundering, and even mistakenly believe that the construction of internal control system of anti money laundering is not worth the loss, which will affect their business development. Fifth, anti money laundering training needs to be strengthened. In terms of the overall situation of the anti money laundering team, there are generally problems of insufficient work experience and low professional quality, especially the front-line staff who handle specific business in financial institutions, bear the obligation to identify and report suspicious capital transactions, and are at the forefront of anti money laundering work, so it is particularly important to strengthen training
I believe that with the graal implementation of various measures taken by the Chinese government and relevant departments to strengthen and improve anti money laundering work, China's anti money laundering work will present a new situation in the near future. The main characteristics of this new situation are: (1) it has a relatively perfect anti money laundering legal system 2) To form an effective anti money laundering monitoring analysis and law enforcement system 3) To train and train an anti money laundering team with high professional quality. However, we should also see that in the process of realizing the new situation of anti money laundering work, we still have very hard work to do and many problems need to be seriously studied and solved. Here, I would like to point out in particular that e to different economic and financial development levels and characteristics, as well as differences in culture, system and other aspects, while learning from the experience of the international community in anti money laundering, we should pay more attention to the study of China's national conditions, and actively explore the characteristics and laws of anti money laundering work suitable for China's national conditions. For example, the anti money laundering work has the characteristics of multi sectoral cooperation, but the ways of cooperation are different in different countries. In some countries, one department is the main one and other departments cooperate with each other; Some countries take the form of a joint body; Some countries adopt the way of forming an independent department; In the different stages of anti money laundering work, the requirements for cooperation are different. There is no unified standard for which way is better, which requires us to explore the anti money laundering cooperation mode suitable for China's national conditions according to the needs of China's anti money laundering practice. For another example, the fund transaction report is the basis of anti money laundering monitoring and analysis. Some countries only require the report on the amount of capital transactions, and some countries also require the report on the large amount of capital transactions. In the relevant international conventions, there are mandatory provisions on suspicious fund transaction reports, but there are no mandatory provisions on large amount fund transaction reports. This also requires us to study and constantly improve the capital transaction reporting system suitable for China's national conditions according to the needs of China's anti money laundering practice. As long as we persist in proceeding from reality and actively explore the characteristics and laws of anti money laundering work suitable for China's national conditions, we will be able to continue to deepen China's anti money laundering work.