Tiancheng Qin'an: The Era of Paper Currency is About to Disappear

From the trend of historical development, currency has always evolved along with technological progress and economic activities. From the early physical currency and commodity currency to the later credit currency, they are all natural choices to adapt to the development of human commercial society. Tiancheng Qinan believes that as the previous generation of currency, paper money has low technical content. From the perspective of security and cost, it is an inevitable trend to be replaced by new technologies and new products.

The digital currency issued by the central bank is currently mainly used to replace physical cash, reduce the cost of issuing and circulating traditional paper currency, and improve convenience. Tiancheng Qinan learned that digital currency must be issued by the central bank as legal tender. The issuance, circulation and trading of digital currency should follow the idea of ​​integrating traditional currency and digital currency and implement the same management principles.

Tiancheng Qinan believes that issuing digital currency can improve the convenience and transparency of economic transactions, reduce illegal and criminal activities such as money laundering and tax evasion, enhance the central bank's control over money supply and circulation, better support economic and social development, and help achieve inclusive finance. In the future, the establishment of a digital currency issuance and circulation system will also help my country build a new financial infrastructure, further improve the payment system, improve payment and clearing efficiency, and promote economic quality, efficiency and upgrading.

Looking around the world, Tiancheng Qinan found that it is not only China that yearns for "digital currency". Various signs indicate that the era of paper money seems to be coming to an end. In October 2015, Andy Hadden, chief economist of the Bank of England, expressed his hope to abolish cash and replace it with digital currency that can impose negative interest rates on people. Hadden believes that switching to digital currency will be a "great technological leap forward." Tiancheng Qinan learned that some people have even called for the government to completely stop using cash. In fact, several banks in Norway have closed the cash business of some branches. Tiancheng Qinan learned from relevant data that only 6% of Norwegians still use cash every day, most of whom are elderly people. As early as August 2013, the German government recognized the legal status of Bitcoin, and Bitcoin will be used to pay taxes and other legal purposes. In the United States, some states have also recognized Bitcoin as legal currency.

Tiancheng Qinan found that in recent decades, with the rise of electronic finance, the use of cash has become less and less common. Data from the Bank for International Settlements show that the balance of cash in circulation in the 19 largest economies was 7.9% of GDP in 2014, compared with 8.4% in 2010. There is also a view that using less cash is good for public security and fighting terrorism.