Why can digital currency end US dollar hegemony
digital currencies such as bitcoin, Ruitai coin, Laite coin and doggy coin were all the rage in China. Now it's becoming more rational.
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
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.
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
China's digital currency is as long as there is a mobile phone, no network, as long as the touch can be paid, and with detailed transaction records, it is very helpful to combat money laundering crime; This currency is mainly aimed at grabbing shares for Alipay, WeChat and POS terminals. It can also pave the way for RMB internationalization. Digital currency is not only safe and endorsed by the state, but the global central bank is pushing digital money. Now the digital currency is still in the testing stage. What time will it be popularized? It will have to wait until the Beijing Winter Olympic Games in February 2022 to fully promote the use
China's central bank's digital currency can be used for daily micro payments. Because it will be more stable with the endorsement of the state, the central bank's digital currency is different from bitcoin and Libra launched by Facebook. I give digital currency legal effect, and indivials can't refuse to accept it. At the same time, it is very convenient to use. It can be paid without binding any bank account. Digital currency will not cause inflation. Now it can be implemented and used in Shenzhen, xiong'an, Cheng, Suzhou and other cities. It also shows that the era of paperless is coming. Digital currency is a new concept with high technology content. In the future, RMB will enter the 3.0 era. Although the current digital currency is more powerful, it is still unable to put an end to money laundering and corruption
Why does the central bank issue digital currency? There may be the following reasons:
1. It helps to lower the threshold of financial services and better promote economic development
recently, the State Bureau of statistics released the relevant economic data in 2015: GDP growth in 2015 was 6.9%, a new low since 2009. Among them, the contribution rate of financial instry to GDP was the highest, with a year-on-year increase of 15.9%; In the first quarter, the contribution of added value of financial services to GDP increased by 20%. Before, for example, from 2012 to 2014, the contribution of financial services instry to real GDP growth was less than 10%, which shows that in the case of economic downturn and the contribution rate of real estate instry to GDP was only 3.8%, the financial instry has become an important support for China's economic growth
in order to further promote the development of finance, on January 15, the State Council issued the development plan for promoting Inclusive Finance (2016-2020), which proposed to "actively guide all kinds of inclusive financial service providers to rece financial transaction costs and expand the breadth and depth of inclusive financial services by means of Internet and other modern information technology.". The digital currency based on blockchain technology has the characteristics of convenience, quickness and low cost. The issuance of digital currency helps to build a new financial infrastructure, further improve the payment system, improve the efficiency of payment and clearing, help Inclusive Finance, and promote economic upgrading
2. Help to rece money laundering, tax evasion and other illegal activities
"digital currency" is convenient for cross-border circulation, and has the characteristics of easy use, anonymity and instantaneity. The current "digital currency", such as bitcoin, can be purchased and traded anonymously through the third-party Internet trading platform, which is more hidden and difficult to be found, so it is often used to launder money
in addition, at present, there are many internal accounts in the domestic financial structure, which are very scattered and lack of a unified national account, so it is impossible to supervise the specific flow of each sum of money or the process of each transaction, giving opportunities for tax evasion, corruption and money laundering
in the future, with the application of blockchain technology, the issuance of digital currency will help to enhance the central bank's control over money supply and circulation, better regulate and supervise digital currency, improve the convenience and transparency of economic transactions, and rece money laundering, tax evasion and other criminal acts
It can better rece the cost of currency issuance and circulation. For example, the proction of RMB requires raw materials (paper), machinery, labor costs, etc. At the same time, as a special commodity, the proction, circulation and recycling of RMB need to invest huge human, material and financial resources to ensure safety. In order to better anti-counterfeiting, we need to constantly update the printing technology. Although digital currency also has the cost of anti-counterfeiting, compared with paper money, it is more convenient to issue and circulate, which can rece the high cost of traditional paper money issuance and circulation, and also better serve our virtual economyin addition, foreign countries are increasingly accepting digital currency. For example, California in the United States has recognized the legalization of digital currency such as bitcoin. Russian President Vladimir Putin thinks that it is possible to use digital currency as a unit of account. The Bank of England has also considered issuing digital currency, which has laid a good foundation for the circulation of digital currency
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