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Under the existing credit currency system, the growth of social debt and total money supply increasingly exceeds the growth of social wealth. More and more countries have negative real interest rates, and the value of currency has shown a long-term and substantial depreciation trend, accumulating increasingly serious monetary and financial risks and even potential crises. It is urgent to promote profound changes in the monetary operation mechanism.
Based on the principle of seeking benefits and avoiding harm, being proactive and prudent, possible options for building a new digital currency system are:
The central bank has built a digital currency platform, which is open to the whole society (open source). All social entities directly open a unique "basic account" on the central bank's digital currency platform. This becomes the most unified, basic and important reference account for digital currency owners, registering each payment and receipt amount one by one and keeping the real-time balance of the account, but the account balance is only for reference and no interest will be accrued.
At the same time, social entities can open "business (special) accounts" at commercial banks and other financial institutions to record the changes in creditor's rights and debts and their results when the account holder opens various financial businesses, and calculate interest according to the agreement. Each social entity's business account is linked to its basic account at the central bank.
Institutions such as commercial banks that engage in monetary derivatives such as loan issuance or bond investment will not only have financial transactions with borrowers, but may also have financial transactions with the central bank. The digital currency accounts of commercial banks at the central bank will be relatively complicated. Commercial banks need to open digital currency loan accounts and deposit accounts at the central bank separately (deposit accounts can also be merged with basic accounts), calculate interest separately according to the agreement, and also need to open a reference account for digital currency issuance.
When a social entity makes a payment or receipt of digital currency, its digital currency wallet carriers must confirm each other and generate a business linkage code. The payee and payee must simultaneously transmit the relevant information and linkage code to the central bank and their own business account opening bank for account processing; the business account opening bank processes the account based on the information received, and must add its own identification to the relevant information and send it to the central bank, and adjust the balance of its digital currency account deposited with the central bank accordingly; the central bank will match the information sent by the payee and payee through the business linkage code and verify that they are consistent, adjust the account balances of the payee and payee and send them reconciliation information. Similarly, the central bank will match the information sent by the payee and payee's account opening banks through the business linkage code and verify that they are consistent, adjust the account balances of the two banks accordingly, and send them reconciliation information. The digital currency clearing process is as follows:
When commercial banks issue digital currency loans, in addition to adjusting the "loan" and "deposit" records, they must also, together with the borrower, send digital currency loan issuance information to the central bank, which will register the lending bank and the borrower's digital currency reference account.
In this way, the central bank has formed a "digital currency account" for the whole society, forming a pattern in which the central bank's "basic account" of digital currency and the "business account" of financial institutions coexist.
The central bank can monitor the payment and receipt of all digital currencies and the specific distribution of digital currencies in real time, and can realize all-round and full-process monitoring of digital currencies. However, the central bank does not handle specific business for units and individuals, and will not have a huge impact on the existing financial system. Financial business such as deposits and loans for units and individuals are still handled by commercial banks and other financial institutions, but financial institutions can only understand information related to their own business and cannot understand the specific situation of the business counterparties, thereby realizing limited anonymity outside the central bank and moderately protecting business secrets and personal privacy.
This may be the most significant breakthrough that the central bank's digital currency can achieve. It will also promote profound changes in the monetary operation system, and play an extremely important role in improving the effectiveness of the central bank's monetary policy, preventing the continued serious over-issuance of currency, and maintaining monetary and financial stability.
Of course, this also puts forward higher requirements on the design of digital currency carriers, the design of multiple information transmission mechanisms for each business (including information transmission between payees and payees and their opening banks and central banks), the development and maintenance of the central bank's digital currency open source system, account processing and data verification, data storage and security management, etc., which cannot be achieved overnight.
Many countries now attach great importance to the central bank's (legal) digital currency and are actively exploring it. Among them, the digital currency DCEP designed by the People's Bank of China has now entered the testing phase. The People's Bank of China stated that DCEP mainly replaces M0 and adopts the existing "two-tier operation system" of "central bank-commercial bank-social entity", but did not disclose specific operation details. In fact, digital currency may only start from replacing M0, and should never be limited to this, but should replace all currencies as much as possible to achieve a profound change in the monetary operation system. If it is limited to replacing M0, its market competitiveness or the actual effect of input-output may be greatly reduced. |
