Wang Yongli: Digital RMB should not be restricted to M0

Mobile Payment Network News: On November 25th, Wang Yongli, chief economist of Neptune Group and former vice president of Bank of China, shared the changes and influence of digital RMB at the 5th China Digital Banking Forum.

Wang Yongli: Digital RMB should not be restricted to M0

He first introduced the basic concept of the digital renminbi. First, the digital renminbi is a digital renminbi, and the essence is still a sovereign currency. Although it uses blockchain, encryption, and intelligent technologies, it is not a decentralized cryptocurrency at all. .
Secondly, the current digital renminbi is positioned as cash in circulation, and its management is highly imitated by cash. Its design and quota management are determined by the central bank’s liabilities, and the two-tier operation of the central bank and operating agencies is implemented. It is mainly used for domestic retail payments and cannot be used for investment and financing services such as loan issuance.

Finally, the digital renminbi App needs to be downloaded with an ID card and mobile phone number, and operating agencies can open digital renminbi wallets with different security levels and limits according to customer needs. The soft wallet user experience and mobile payment have not changed much, and the hard wallet offline payment can only

It is a small emergency and cannot become mainstream.

But he also said that there may be some problems in positioning the digital renminbi only at M0.

The first is that the scale of M0 is quite limited. At present, the total currency of renminbi has exceeded 230 trillion yuan, while M0 is only more than 8 trillion yuan. And with the widespread use of mobile payments, the real cash scale for payment is even smaller. Therefore, the digital renminbi should be strictly enforced.

Being limited to the existing M0 scale will make the digital renminbi very small, difficult to play its due role, and even more difficult to meet the needs of renminbi internationalization.

Secondly, it increases the difficulty of management. At present, the exchange of digital renminbi is mostly carried out from bank accounts. If digital renminbi can break through the existing M0 scale and expand the investment and cause bank deposits to move, it may have an impact on the stability of the financial system.

hit. At the same time, digital renminbi is positioned as cash but adopts a deposit-like bookkeeping and clearing method (soft wallet), which will form a coexistence pattern of two operating systems of digital renminbi and traditional renminbi (deposits), which will also bring new troubles to monetary and financial management. .

Finally, social attractiveness is insufficient. In terms of current positioning, the digital renminbi is a liability of the central bank. For operating institutions, it is only an off-balance sheet business of agency. However, it requires huge manpower and material resources for this, and it is difficult to form an expected return on investment. For business units

Compared with individual residents, the payment experience has not changed much compared with mobile payment, and the wallet balance does not count interest.

Therefore, he believes that the digital renminbi needs to make some possible deepening changes fundamentally. Specifically:
1. The digital renminbi directly redeemed by the central bank can be positioned as M0, but the digital renminbi should be allowed to be used in various financial services, including bank credit and central bank re-lending to derive currency. Finally, replace all traditional currencies with digital renminbi as soon as possible, avoiding two sets of operations

The long-term coexistence of the system allows the scale of the digital renminbi to be fully expanded to better meet the requirements of the whole society and even internationalization.

2. All social entities (including financial institutions) can download the central bank’s digital RMB app and open the only real-name digital currency “basic account” with the central bank. This account is only used for filing, not for business, and no interest-bearing charges.
3. Various financial services are still handled by corresponding financial institutions. Social entities need to open digital currency “business accounts” in financial institutions, carry out interest-bearing charges in accordance with business agreements, and maintain a connection with their basic accounts with the central bank. Commercial banks also need

Open borrowing accounts and deposit accounts in the central bank separately, and calculate interest separately in accordance with the agreement to avoid impact on financial institutions.

4. All the receipt and payment information of the digital renminbi must be sent to the central bank and the handling agency for processing, so as to form a “digital currency account” for the whole society in the central bank, and form a digital currency “basic account” and “business” in the entire financial system “Account” coexistence and mutual connection

Pattern. Promote the in-depth reform of the digital renminbi and seek advantages and avoid disadvantages.

In his opinion, the impact of the digital renminbi after the profound changes is that the central bank can grasp the most complete currency user information and transaction data, realize all-round and full-process monitoring of the currency, and improve the accuracy and effectiveness of the central bank’s monetary policy. sex.
In addition, he said that the central bank digital currency is still a national sovereign currency, and different countries may have different central bank digital currencies. Therefore, in the future, there will be controls on the circulation and use of digital currencies in different countries, and it is necessary to build a multilateral central bank digital currency platform to connect

On the basis of satisfying anti-money laundering, anti-terrorism, and protecting privacy and data security, the “bridge” formulates corresponding rules and interfaces to form a universal connection system.

He also emphasized that whether digital currency can circulate across borders and become an international currency still has international competition, and “technology” including digital renminbi is not a decisive factor for the internationalization of the renminbi. Only the currency of the most powerful country can become the most powerful. Important international currency.
According to mobile payment network, Wang Yongli has published articles on many occasions, saying that the digital renminbi should not be limited to M0. His public speech this time also reiterated this point of view.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/wang-yongli-digital-rmb-should-not-be-restricted-to-m0/
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