Bitcoin rose 8.11% due to multiple events

According to Huobi.com, since February, Bitcoin has been driven by multiple events, with a cumulative increase of 8.11%. In the week after the Spring Festival, the cumulative trading volume of Bitcoin was 14.85 million, with a turnover of 38.5 billion. Litecoin rose by 3.88%, with a cumulative trading volume of 200 million and a cumulative turnover of 3.2 billion in two weeks. In terms of industry, Zhou Xiaochuan's recent speech on the RMB exchange rate, macro-prudential policy framework and digital currency has sparked heated discussions in the financial industry.

Principles of digital currency issuance

Huobi's analysis team believes that Zhou Xiaochuan further clarified the encryption features of the "digital version of the RMB" in his speech. He mentioned that blockchain technology is one of the research directions of the digital currency research team of the People's Bank of China. In addition, it also includes mobile payments, trusted and controllable cloud computing, cryptographic algorithms, security chips and other fields. The issuance of digital currencies in the future needs to follow four principles. The first is to provide convenience and security. The second is to strike a balance between protecting privacy and maintaining social order and combating illegal and criminal activities, especially for crimes such as money laundering and terrorism. The necessary containment measures must be retained. The third is to facilitate the effective operation and transmission of monetary policy. The fourth is to retain the control of monetary sovereignty. Digital currency is freely convertible and controllable.

Digital Currency Management Principles

Zhou Xiaochuan said in response to a question from China Business News that the digital currency issued by the central bank is currently mainly to replace physical cash, reduce the cost of issuing and circulating traditional paper money, and improve convenience. Overall, the central bank will give full consideration to the existing monetary policy regulation, money supply and creation mechanism, and monetary policy transmission channels when designing digital currency. Zhou Xiaochuan introduced that at present, the issuance and withdrawal of cash are based on the current binary system of "central bank-commercial bank institutions". The issuance and operation of digital currency should still be based on this binary system, but the transportation and custody of currency have changed: the transportation method has changed from physical transportation to electronic transmission; the storage method has changed from the central bank's issuance library and the banking institution's business library to the cloud computing space for storing digital currency. Ultimately, the security and efficiency of the issuance and withdrawal of digital currency will be greatly improved.

Digital currency gradually replaces cash

Ren Zeping, managing director of Guotai Junan Securities Research, believes that from the perspective of economic fundamentals such as current account balance and changes in the real effective exchange rate, there is no basis for the continued depreciation of the RMB exchange rate. In response to international concerns that China will increase exports, boost GDP and intensify the "exchange rate war" through RMB depreciation, he said that China has no motivation to depreciate in order to expand net exports. There is no timetable for the launch of digital currency, and digital currency and cash will coexist and gradually replace each other for a long time.