Recently, the progress of China's legal digital currency research and development has aroused widespread attention.

The relevant person in charge of the Digital Currency Research Institute of the People's Bank of China (PBOC) said recently that the current research and development of digital RMB is steadily advancing, according to CCTV.

First, internal closed pilot tests will be conducted in Shenzhen, Suzhou, Xiong'an New District, Chengdu and the future Winter Olympics scene to continuously optimize and improve Features.

PBOC has been studying legal digital currency since 2014.

According to the relevant person in charge of the PBOC Digital Currency Research Institute, the current digital RMB research and development work is being steadily advanced.

The digital RMB system has basically completed the top-level design and standard formulation on the premise of adhering to double-layer operation, currency (M0) substitution and controlled anonymity, Function research and development, joint debugging and testing.

The relevant person in charge of the PBOC Digital Currency Research Institute emphasized that the current online DC/EP information is the test content in the process of technology research and development and does not mean that the digital RMB is officially issued.

The current closed testing of digital RMB will not affect the commercial operation of listed institutions, nor will it affect the RMB issuance and circulation system, financial market and social economy beyond the testing environment.

What is the Chinese version of digital currency?

Simply put, PBOC digital currency is the electronic version of RMB.

Speaking of digital currency, everyone's first reaction may be Bitcoin or Libra planned by Facebook.

However, unlike these so-called digital currencies, the digital currency to be launched by the People's Bank of China has a national credit endorsement, which can be said to be the electronic version of the renminbi. Therefore, the central bank's digital currency is forensic.

More importantly, with the endorsement of the state, the central bank's digital currency value will be more stable. However, the so-called virtual currency such as Bitcoin cannot guarantee the stability of the currency value, and it has become common practice to "cut the leek".

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. There is no difference compared to paper money.

At the same time, all current regulations on cash management, anti-money laundering, anti-terrorism financing, etc. should be followed when using.

What are the benefits of digital RMB?

Low issuance costs and more convenient transactions ...

A senior industry insider said that payments, transactions, and anti-money laundering based on RMB cash are becoming more and more difficult to manage in modern society, and the cost is also increasing. The issuance of digital currency can effectively solve the above problems.

At the same time, the Chinese version of digital currency does not need to be tied to any bank account, getting rid of the control of the traditional bank account system.

In addition, in the case of poor network signals, the payment functions of online banking and payment platforms are often paralyzed, and the dual offline technology of DC/EP can ensure that in extreme cases, the central bank's digital currency is used like paper money.

For example, in the absence of a network, as long as two mobile phones equipped with a DC/EP digital wallet are touched, the transfer or payment function can be realized.

Will the issuance of digital currency cause inflation?

Equivalent replacement of currency in circulation will not make money gross

The digital currency issued by the central bank starts with the replacement of banknotes and coins in circulation by digital currency. Assuming that the currency in circulation is now 100 yuan, the central bank digital currency will replace the equivalent of 100 yuan.

In order to ensure that the central bank's digital currency is not oversold, commercial institutions pay 100% and 100% reserve to the central bank.

That is to say, at the time of issuance, PBOC first exchanges digital currency to banks or other operating agencies, and then these agencies exchange to the public.

In addition, considering that the previous digital currency is limited to pilots, it will not be issued in large quantities and fully promoted in the short term, and the currency circulation rate will also remain at a normal level.

Therefore, digital currencies will not cause inflation.