Why can digital currency overturn the hegemony of US dollar

1.

digital currency is likely to change the current world monetary pattern and become the mainstream of currency in the future

the essence of money is a tool to measure the price, from the most primitive shells, later copper coins, gold and silver, and now paper money. They do not have the value attribute, but when people give it the value measurement standard, it acts as a tool to measure the value. They are credit currencies. It is because of the strong credit endorsement of the state that the public recognizes them as the medium of goods exchange

this also means that you can go out later without anything. As long as you have money in your digital currency, you can buy anything you need. Later, with the development of the Internet of things, everything will be connected, and your clothes, shoes and bags may become the carrier of digital currency

at present, digital currency is still in the exploratory stage, and its use is still to download app, and then use it. Recently, Shenzhen has issued several rounds of red packets, each user can get 200 yuan red packets, which can be used in designated shopping malls, supermarkets, restaurants and many other places, and some enterprises use it to pay wages, and large-scale pilot will be implemented in the future

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2.

Hello, the replacement of paper-based RMB by digital RMB is basically certain. Just as the era goes from entity to e-commerce, RMB also goes from offline to online. Its function is exactly the same as paper money, that is, the digital version of paper money

at present, China's digital currency is a leading technology, which is bound to accelerate its digital currency construction in the short term, in order to find the gap with DCEP. However, DCEP can ultimately promote the nationalization of RMB, still depends on the steady growth of domestic economy and the international circulation ability of RMB itself, not only on the digital technology of RMB, but also has a long way to go

3. The core value of CBDC can be summarized as four points: first, the original purpose is to let the central bank better manage money creation and supply, enhance the effectiveness of monetary policy transmission mechanism and better deal with the business cycle. Second, the construction of payment and clearing infrastructure based on blockchain related technologies can rece costs and increase efficiency. Digital currency can greatly rece the cost of currency issuance, circulation, use and other links, and realize banknote free transactions, which is also in line with the current trend of rapid development of electronic payment. Third, it has given the central bank stronger control over the monetary system, such as KFC, anti money laundering, anti-terrorism financing, and some targeted policies. Before the launch of Libra, the central bank attached importance to CBDC mainly for the above three purposes. But now, the significance of CBDC in promoting the internationalization of RMB has become more important than ever. This is the fourth purpose of the central bank. Judging from the current progress of RMB internationalization, there are indeed many difficulties. One is the US led encirclement and interception, and the other is the turbulence in the stock and exchange markets. In order to break the encirclement led by the United States, realize the normal development of the stock exchange market and the foreign exchange market, and realize the internationalization of RMB, it is really a good way for the central bank to issue digital currency. On the 10th anniversary of RMB internationalization, RMB internationalization has made remarkable achievements. 13 international financial institutions around the world began to pay attention to China's bond market. In the tide of interest rate rection in developed countries, negative interest rate has become a conventional means, and China's bonds are very competitive in the world. As of the second quarter of 2019, 38 countries have signed currency swap agreements with China, with a total amount of 3.67 trillion yuan. The one belt, one road, which one belt, one road to push forward, is continuously creating demand for RMB internationalization, and the export of RMB has become an important means of "one belt and one road" internationalization of RMB. In addition, RMB is one of the most active currencies in the global foreign exchange market, and London has surpassed Hong Kong as the world's largest offshore RMB foreign exchange trading center. With the steady development of China's economy, RMB assets will continue to be favored by all countries in the world< One belt, one road or other friendly country, was also shared by the Central Bank of China when it issued the CBDC. It shared some of the mint rights with br />
CBDC. How to participate? Including the following two cases, let's take Kazakhstan as an example. The first is that Kazakhstan can issue RMB denominated Kazakh government bonds. The issuer is Kazakhstan, but the RMB denominated bonds are sovereign bonds for Kazakhstan, which can also be sold to the Central Bank of China in exchange for CBDC. The second is that Kazakhstan issues treasury bonds denominated in its own currency, which are issued by Kazakhstan and priced in its own currency. This method is the easiest for Kazakhstan, because this is their own national debt, which is sold to the Central Bank of China, which gives it CBDC. The similarities between the two lie in that they both sell treasury bonds to the Central Bank of China, but the issuers of treasury bonds are not the same, and the pricing currencies of treasury bonds are not the same, so the requirements for Kazakhstan are not the same. In theory, these ways can be used as a political tool to influence and regulate the relationship between the Chinese government and Kazakhstan<

4 digital currency will become the biggest magic weapon of RMB internationalization

China is now facing the biggest challenge, in terms of currency, in fact, the internationalization of RMB. The monetary settlement system based on US dollar has brought great problems to the decision-makers outside the US dollar. The best way to rece the status of US dollar is to replace us dollar with a global digital currency to end the dominant advantage of US dollar. The Chinese version of CBDC is likely to become the biggest magic weapon to promote the internationalization of RMB and end the hegemony of US dollar. The opportunity for RMB internationalization lies in the trend of de dollarization. Therefore, we need friendly countries other than US dollars to participate in China's digital currency. Taking the lead in the use of digital currency in block trading and financial settlement to bypass the restrictions on trading in US dollar will certainly realize the development of de dollarization and form a new currency trading system dominated by China and participated by many parties. So how to achieve it? In essence, it is to transfer benefits, so that non dollarized friendly countries can participate in the issuance process of CBDC, and even share the seigniorage of RMB. It is the most effective magic weapon to embody the spirit of democratization and benefit sharing of blockchain and bitcoin in the design of sovereign currency, which is also the most practical way to realize the internationalization of RMB.

4.

The role of digital currency:

1. First of all, the central bank's digital currency can provide a huge data base for monetary policy and macro Prudential policy, so that the regulatory authorities can collect real-time trading books of different frequency and different institutions according to their needs, and it is complete and real. This information advantage can help the central bank use policy tools more accurately and flexibly

Secondly, the central bank's digital currency technology can track the flow of funds and help the regulatory authorities to comprehensively monitor and assess financial risks. Finally, the central bank's digital money technology is concive to the transmission of interest rate of monetary policy. Digital currency technology supports "point-to-point" payment and settlement, which can improve the liquidity of market participants. Only the digital currency of the central bank, which is generally accepted by the whole society, can radiate this advantage to the participants of different financial markets, so as to improve the liquidity of financial markets. This will make the term structure of interest rate smoother and the transmission mechanism of interest rate smoother

extended data:

digital currency can be considered as a virtual currency based on node network and digital encryption algorithm. The core characteristics of digital currency are mainly reflected in three aspects: because it comes from some open algorithms, digital currency has no issuing subject, so no one or institution can control its issuing; Because the number of algorithm solutions is fixed, the total amount of digital currency is fixed, which fundamentally eliminates the possibility of inflation caused by the overuse of virtual currency; Because the transaction process needs the approval of each node in the network, the transaction process of digital currency is safe enough

5. Bitcoin data (ledger) is stored in the computer (mining machine) of the whole node.

6.

The reason for China to accelerate the promotion of digital RMB is to protect the currency sovereignty and legal currency status, and lead the new international financial pattern

1

Bai Liang, executive vice president of digital assets research institute, said:

first of all, from the perspective of international competition, cryptocurrency represented by bitcoin and Libra (Libra) and other global stable currencies are trying to play the role of currency and finance. These cryptocurrency assets deal with transactions in a decentralized way, which will challenge a country's monetary sovereignty. The introction of digital RMB has the purpose of protecting currency sovereignty and legal currency status

secondly, from the perspective of the domestic financial environment, the introction of digital RMB is to adapt to the rapid development trend of mobile payment, at the same time, it also takes into account the inclusive nature of finance, to avoid the deepening of financial exclusion, and it is a public good to truly serve the majority of the people. Secondly, digital RMB can also identify and crack down on money laundering, tax evasion and other criminal acts to a certain extent, so as to ensure the stability of financial order

2. Lead the new international financial pattern

at present, legal digital currency is becoming a "new battlefield" in the competition among sovereign countries. The introction of digital RMB has a profound impact on financial and economic activities in the digital era

first of all, digital RMB helps to form a new international financial pattern and help RMB internationalization. To protect national currency sovereignty and legal currency status is the primary goal of digital RMB issuance

secondly, the introction of digital RMB helps to improve China's financial efficiency and optimize the allocation of resources. Ba Shusong, chief economist of China Banking Association, believes that legal digital currency can achieve a closer combination of monetary policy and fiscal policy. Through the smart contract with "conditional trigger mechanism", it can limit credit subjects and use scenarios, achieve accurate loan delivery, avoid capital idling, and achieve a more efficient macro-control system

thirdly, digital RMB brings new development opportunities for economic and financial activities based on digital technology. Bai Liang believes that digital RMB can become "data" from all aspects of issuance, circulation, storage, investment and cross-border flow, which has opened up the last mile for financial technology companies to use big data, blockchain, artificial intelligence, cloud computing and Internet of things to link and process these data

< H2 > extended information: < H2 >

Digital RMB, abbreviated as "DC / EP", is the abbreviation of digital currency and electronic payment, which shows that digital RMB is not only a currency, but also an electronic payment tool. Instry insiders pointed out that when discussing digital RMB, we should first confirm that its basic attribute is currency, which is the composition and supplement of the existing legal currency system, and then it is a digital payment tool

Based on this, China's digital RMB system adheres to the basic principles of cash (M0) substitution, double-layer delivery and controllable anonymity

first of all, the Central Bank of China locates the digital RMB as M0 substitution, which is different from the decentralized characteristics of private digital currency. The issuance of digital RMB is managed by the central bank, and the issuer is the people's Bank of China

secondly, the double-layer delivery mechanism means that the central bank is responsible for the delivery and return of digital currency, but the central bank does not directly connect with consumers, but applies to the central bank for the exchange of digital currency through commercial banks, which provide the central bank's digital currency and corresponding services to the public

thirdly, from the perspective of payment data privacy protection, digital RMB realizes "controllable anonymity" based on encryption technology. Wu Tong, member of the academic and Technical Committee of digital assets research institute, introced that privacy protection technology can ensure the security of user data, avoid the disclosure of sensitive information, and not damage the usability; At the same time, it realizes the management of the use rights of the relevant data, ensures the traceability under certain conditions, and only the central bank can obtain the full amount of user identity information and transaction flow

7.

In my opinion, the significance of issuing digital currency in China is as follows:

1. Rece the manufacturing cost, transportation and circulation cost of banknotes and coins

at present, China has seven paper currency printing plants and three coin foundries, large and small. In 2001, China's currency circulation was 15.289 trillion, and in 2016, it was 151.950 trillion, It's increased tenfold in 15 years. In addition, coupled with the exchange of damaged currency, the money spent on RMB printing in China every year is not a small expense. The expenses include special paper, special metal materials, dyes, machinery and equipment, personnel and so on. In addition, the cost of transportation and circulation after printing is also a big expense. With the promotion and popularization of digital RMB, the phenomenon that RMB needs to be transferred from central banks in different places and the phenomenon that cash trucks run all over the street will be effectively improved

this advantage of China's digital currency can effectively promote the process of currency globalization in China, and has certain significance for breaking and shaking the US dollar hegemony in the future