May 13, 2024

Digital Money Blockchain "13th Five-Year Plan"

As the dawn is approaching, the wind is coming.

The 13th Five-Year Plan issued by the State Council proposes to strengthen strategic frontier technologies such as blockchain and artificial intelligence and make advance arrangements in other countries. The Ministry of Industry and Information Technology also issued a white paper pointing out the development process of the core technology of the blockchain. The ministry is also cooperating with relevant enterprises and hopes to formulate technical standards as soon as possible.

Zhou Xiaochuan, then the governor of the central bank, proposed that "legal digital currency can only be issued by the central bank, and the blockchain is an optional technology for issuing digital currency." To this end, the central bank also held a seminar on digital currency, and successfully piloted the prototype of digital currency bills.

Studying digital currency may be just a icing on the cake for the US economy. For China, this is a major historical opportunity. If you miss this opportunity, no matter what the Chinese economy is. The degree (like Japan in the 1980s and 1990s), the final result may still be that the yuan will have to become the lifelong shadow currency of the dollar like the yen. The only thing that can be waited for is the big turmoil in the United States, and the dollar has withdrawn from the historical arena, but this wait seems to be too costly. Therefore, studying digital currency is actually looking for a bigger way out and more possibilities for the future of the renminbi.

The People's Bank of China has issued a recruitment announcement on its website, and its “People's Bank of China Institute of Printing Science” has recruited three positions, namely the design and development of software and hardware systems for digital currency and related underlying platforms. And research on key cryptographic techniques used in digital currency, symmetric, asymmetric cryptographic algorithms, authentication and encryption. Requires experience in system architecture design, blockchain technology development or application experience, and big data platform development experience.

The organization of the "People's Bank of China Institute of Printing Science" can be explained a little. It was founded in August 1959 and is affiliated to the head office of the People's Bank of China. It is a professional research unit for banknote printing, focusing on application development research and taking into account applied basic research. It has research labs such as ink, plate making, banknote paper, anti-counterfeiting technology, and printing machine design, as well as a plate making and printing laboratory. It is the only research and development research unit in China that uses the printing and anti-counterfeiting technology of securities as its content.

In other words, the issue of the issuance of digital currency by the People's Bank of China has entered the implementation stage, rather than a simple preliminary investigation or discussion. Because the People's Bank of China Institute of Printing Science is responsible for how to specifically implement the issuance and printing of banknotes, as well as anti-counterfeiting work. This is the last link in the currency issuance. After completing this step, the “banknote” will enter the field of social circulation.

Digital Money Blockchain "13th Five-Year Plan"

Why does the People’s Bank of China issue digital currency? There are three considerations.

First, strategy

Regarding the strategy, a lot has been mentioned in the previous article. In the future, the game between the sovereign credit currency such as the renminbi and the US dollar will involve the final distribution of the global financial dividend. China is certainly not satisfied with merely staying in the stage of sharing the demographic dividend, while finance Dividends need strong money credit and financial settlement networks to support.

Even if the dollar goes to a dead end, it is difficult for the RMB settlement system to replace the dollar system in terms of settlement and payment, because it is very difficult to change the trading habits unless the original trading model is completely subverted. This is like saying that today's Microsoft company does nothing, and has enough patent revenue every year to keep Bill Gates in the top of the world's rich list.

Of course, the world is so wonderful, just at this time, the great digital currency experiment began. Digital currency technology based on encryption, decentralization, blockchain distribution, etc., completely overturns the logic of the original settlement system such as SWIFT system, and is the only technology that can completely replace the existing global dollar settlement system and operate independently.

Second, the trend

The digitization of money has become a trend. Three years ago, no one could think that nowadays, with a mobile phone, downloading a WeChat or Alipay, you can receive and pay at any time, and the demand for holding cash is increasing. less.

For China, only the electronicization of money is difficult to meet the needs of the future. From the perspective of security and the internationalization of the RMB, only the electronicization can not get rid of the central clearing system and cannot be produced in the international market. Competitive advantage and trust above the dollar, the latter is the direction and the end.

Then the paperlessness of money is a trend. This paperlessness has two meanings. One is to electronically convert existing currency, and the other is to completely change the system and issue new digital currency to replace the existing currency. This is also the biggest challenge in issuing digital currency.

Digital Money Blockchain "13th Five-Year Plan"

Third, the reality

At the beginning of this year, the Agricultural Bank of China broke the "ticket case", involving a total amount of 4 billion yuan. The employees were suspected of illegally taking 3.8 billion yuan in bills, and used illegally seized bills to repurchase funds, and did not establish a ledger. A considerable part of the repurchase funds went into the stock market in violation of regulations, and due to the falling stock price, there was a huge financial gap. Redeem. Then, CITIC Bank, Tianjin Bank, Qilu Bank, etc. all had similar situations. Later, the central bank set up a bill trading platform to solve this problem, and paper papers will all withdraw from the market in the next two to three years.

At present, China's digital currency, especially the digital currency that the central bank is preparing to issue, is likely to make an attempt in the bill market first. This distributed blockchain payment technology can completely record all transactions and all destinations. It does not depend on a single trading platform and cannot be tampered with. You know, if digital currency can be realized first in the ticket trading market, it is not far from the real social digital currency, because only one bank of ICBC has an annual transaction volume of more than 10 trillion, if it can meet this order of magnitude. The transaction, the digital currency has succeeded.

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