The central bank responded: The central bank’s digital currency will not be issued in large quantities or fully promoted in the short term

Source: CCTV News Client Original title: "What is the Chinese version of digital currency? How to use it? The central bank responds! "

Recently, the progress of the research and development of my country's legal digital currency has attracted widespread attention from the society. The relevant person in charge of the Digital Currency Research Institute of the People's Bank of China recently stated that the research and development of the digital RMB is currently being steadily promoted, and internal closed pilot tests will be carried out in Shenzhen, Suzhou, Xiongan New Area, Chengdu and the future Winter Olympics scenes to continuously optimize and improve functions.

The People's Bank of China has been researching legal digital currency since 2014. According to the relevant person in charge of the Digital Currency Research Institute of the People's Bank of China, the research and development of digital RMB is currently being steadily promoted. The digital RMB system has basically completed the top-level design, standard setting, function development, joint debugging and testing, and follows the principles of stability, security, controllability, innovation and practicality, while adhering to the dual-tier operation, currency in circulation (M0) substitution, and controllable anonymity.

The relevant person in charge of the Digital Currency Research Institute of the People's Bank of China emphasized that the current DC/EP information circulated on the Internet is the test content in the process of technical research and development, and does not mean that the digital RMB has been officially launched. The current closed testing of the digital RMB will not affect the commercial operation of listed institutions, nor will it have an impact on the RMB issuance and circulation system, financial markets and social economy outside the testing environment.

Q: What is the Chinese version of digital currency? How to use it?

A: Simply put, the digital currency of the People's Bank of China is the electronic version of the RMB. Speaking of digital currency, the first thing that comes to mind may be Bitcoin or Libra, which Facebook plans to launch. However, unlike these so-called digital currencies, the digital currency that the central bank of my country is about to launch is backed by the national credit and can be said to be the electronic version of the RMB. Therefore, the central bank's digital currency is legal tender.

More importantly, with the backing of the state, the value of the central bank's digital currency will be more stable. However, so-called virtual currencies such as Bitcoin cannot guarantee the stability of their value, and being "ripped off" has become a common occurrence.

From the perspective of usage scenarios, the central bank's digital currency does not pay interest and can be used in small, retail, and high-frequency business scenarios, which is no different from paper money. At the same time, when using it, all current regulations on cash management, anti-money laundering, and anti-terrorist financing should be observed.

Q: What are the benefits of digital RMB?

A: Low issuance cost and more convenient transactions... Senior industry insiders said that the management of RMB cash-based payments, transactions, and anti-money laundering is becoming increasingly difficult and costly in modern society. Issuing digital currency can effectively solve the above problems.

At the same time, the Chinese version of digital currency does not need to be bound to any bank account, breaking away from the control of the traditional bank account system.

In addition, when the network signal is poor, the payment functions of online banking and payment platforms are often paralyzed, and DC/EP's dual offline technology can ensure that in extreme cases, the central bank's digital currency can be used like paper money. For example, in the absence of a network, as long as two mobile phones equipped with DC/EP digital wallets touch each other, the transfer or payment function can be realized.

Q: Will issuing digital currency trigger inflation?

Answer: Equivalent replacement of currency in circulation will not cause money to depreciate. The digital currency issued by the central bank starts with digital currency replacing paper money and coins in circulation. Assuming that the currency in circulation now is 100 yuan, the central bank's digital currency will replace this 100 yuan.

In order to ensure that the central bank's digital currency is not over-issued, commercial institutions pay full and 100% reserve to the central bank. In other words, when issuing, the People's Bank of China first exchanges the digital currency to banks or other operating institutions, and then these institutions exchange it to the public.

In addition, considering that the initial digital currency is limited to pilot projects and will not be issued in large quantities and fully promoted in the short term, the currency circulation speed will also remain at a normal level. Therefore, digital currency will not cause inflation.