In fact, even US Treasury Secretary Yellen and Federal Reserve Chairman Powell said that they are seriously studying the feasibility of digitizing China's digital RMB and US dollar. However, in this huge potential market, the American media believe that China has "taken the lead".
WSJ: China has created its own digital currency, which is the first time among major economies in the world.
"Digital RMB may shake the pillar of American power"
"One thousand years ago, when money refers to coins, China invented paper money. Now, the China administration is making cash digitally, and this re-imagination of the currency may shake the pillar of American power. "
The Wall Street Journal first described China's digital renminbi. According to the report, since the Second World War, the US dollar has been the "overlord" of the global financial system, but China is trying more forms, including currency digitization, to "take the lead" in these future technologies.
Digital RMB data map surging image map
The report explained that although Apple Pay in the United States and WeChat Pay in China have virtualized transactions, these are only electronic transfer methods, while the digital RMB in China actually turns legal tender into computer code, which is the biggest difference.
When talking about China's legal digital currency, Yi Gang, governor of the People's Bank of China, once said that the central bank will combine digital currency with electronic payment tools to launch a package plan with the goal of replacing some cash. In other words, China's legal digital currency is a digital substitute for paper money and a "digital RMB".
According to the data of the Bank for International Settlements, the proportion of US dollar in international foreign exchange transactions far exceeds that of all other currencies, accounting for about 88%, while RMB only accounts for 4%. However, the Wall Street Journal quoted analysts and economists as saying that digitalization itself will not make the RMB a competitor to the US dollar in international bank wire transfers, but under this new currency form, the RMB may be "welcomed" on the edge of the international financial system.
One of the use scenarios is to use the US dollar to deal with international sanctions imposed by the United States. The report explained that at present, there are more than 265,438+/kloc-0,000,000 banks in the world that need US dollars when doing business, and the United States has been actively seeking information on the trend of major cross-border currencies.
This allows the United States to freeze these entities out of the global financial system by prohibiting banks from trading with individuals and institutions. The outside world has always criticized this practice as "the weaponization of the dollar."
In fact, the U.S. Treasury has a database of so-called sanctioned individuals and companies, involving almost every country on earth. For a long time, the United States imposed sanctions on Iran and North Korea, which made the economies of these two countries "difficult". After the turmoil in Myanmar in February this year, the United States also used sanctions to prevent the financial assets of senior military officers in Myanmar from flowing through banks.
At present, all major banks in the world have "SWIFT codes". When the user makes a wire transfer, the remittance bank sends a payment message according to the bank international code of the receiving bank, and the money can be remitted to the receiving bank.
According to the report, this information network for commercial bank transfers can be monitored by the US government, but if digital RMB is used, there is no need to use the bank international code.
In addition, The Wall Street Journal also noted a series of recent measures taken by China in digital RMB. For example, on February 24th, the Bank of China announced that the digital currency Institute of the People's Bank of China, the Hong Kong Monetary Authority, the Central Bank of Thailand and the Central Bank of the United Arab Emirates jointly launched the multilateral central bank digital currency Bridge Research Project (m-CBDC Bridge) to explore the application of the central bank digital currency in cross-border payment. This project is supported by the Hong Kong Innovation Center of the Bank for International Settlements.
Therefore, the Wall Street Journal speculated that China is positioning the digital RMB for international use and designing it to get rid of the shackles of the global financial system. It will provide people in poor countries with the choice of international transfer, and even limited international use may alleviate the impact of US sanctions.
"digital currency may reshape the fundamentals of the financial industry, just as Amazon subverts the retail industry and Uber subverts the taxi industry."
The dollar also wants to be digitized, but experts worry: or make some bad policy choices.
The WSJ report also mentioned some application scenarios of digital RMB in China. In recent months, more than 654.38 million people in China downloaded a mobile phone application launched by the central bank, allowing users to use small amounts of digital cash issued by the government in Starbucks and McDonald's.
On February 24th, Chengdu digital RMB consumption red envelope test activity was launched.
A Beijing woman told the Wall Street Journal that the digital RMB is "very good" and she can pay for her daughter's birthday photos just by pointing her mobile phone at the scanner.
The Wall Street Journal commented that digital currency "looks like a potential tool for the government to realize macroeconomics", tracking people's spending in real time, speeding up disaster relief, or marking criminal activities. However, the media said without foundation that the China government would "gain great new power" and provide "new tools for state monitoring".
However, the report also mentioned that Mu Changchun, director of the digital currency Research Institute of the People's Bank of China, recently told the outside world that the digital RMB has the characteristics of controllable anonymity, which meets the reasonable demands of anonymous payment and privacy protection. For example, telecom operators have participated in the research and development of digital RMB, but according to relevant laws and regulations, telecom operators are not allowed to disclose user information to third parties such as the central bank. Therefore, the digital RMB wallet opened with the mobile phone number is completely anonymous to the central bank and various operating institutions.
In fact, American financial officials, as well as various economists, have realized the importance of digital currency and even raised it to the level of "national security".
In recent weeks, when asked about the possible impact of currency digitization in China and other countries on the US dollar, US Treasury Secretary Yellen and Federal Reserve Chairman Powell both said that they were seriously studying this issue and the feasibility of dollar digitization.
For example, at a recent Senate hearing, an American senator asked about the feasibility of digitizing the US dollar and whether it could continue to help defend the "hegemonic" status of the United States.
In this regard, Powell replied that studying this issue is a "very priority" project. "We don't need to be the first, we need to stick to the end."
In fact, Powell's statement is not unreasonable. In recent years, digital currency has gradually become a market with great potential. According to the data quoted by The Wall Street Journal, more than 60 countries are at different stages of researching or developing digital currency. According to the statistics of the World Bank, there are 654.38+700 million people in the world without bank accounts. For them, digital currency has the greatest potential.
Therefore, Lipski, a former employee of the International Monetary Fund and now a member of the Atlantic Council think tank, commented: "Anything that threatens the dollar is a national security issue. In the long run, this poses a threat to the dollar. "
But other experts are somewhat pessimistic. Kevin Warsh, a former governor of the Federal Reserve and a member of the Hoover Institution of Stanford University, believes that the rapid development of digital currency in China has made the United States pay attention to the necessity of financial infrastructure modernization. "If we wait five years or 10 years, we may have some very bad (digital currency) policies."
Since China began to test the digital RMB with public participation in 2020, the development of digital RMB has gradually entered the public eye. From 20 14 to 2020, the pilot cities of digital RMB will continue to expand, and it is expected that more and more people will experience digital RMB.
Regarding issues of external concern such as cross-border transactions, Wang xin, director of the Research Bureau of the Central Bank, said at the press conference of the State Council Office held on April 1: "The design of digital RMB in China is mainly used for domestic retail payment, but when conditions are ripe, if there is such a demand in the market, digital RMB can also be used for cross-border transactions."
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