Deputy director of the central bank credit center speech summary, the concept of China version of digital currency
In this paper the author have done in April 24, 2016 Chinese Financial Forum forty “fortnight Roundtable 158th” block chain and virtual currency innovation and development “on the yuan force, He Dong keynote comment, after finishing.
The design of digital currency needs to consider the following things:
First, to clarify the concept, definition and classification of digital currency, function, characteristic, put forward the definition of digital currency China, similarities and differences and relevance to distinguish the legal digital currency and private digital currency in the technical and economic characteristics and institutional arrangements, to discuss the process of digital currency fulfill the functions of money, and how to meet the high quality of monetary system the;
Second, the need for digital currency operation in-depth study, explore the withdrawal mechanism of the central bank, commercial bank two yuan issuance and circulation system, and based on digital currency transactions. On the basis of this discussion, meet the technical route and key technology of the operation mechanism of the choice, to carry out research and breakthroughs in key technologies;
Third, to the role and influence of digital currency on monetary and financial system to study;
Fourth, scientific top-level design digital currency supervision form based on the above research results, including the development and design of digital currency, to develop appropriate regulatory coordination tools, select the appropriate regulatory control index.
Chinese digital currency
1, digital currency: from the three party to the two party model breakthrough mode
Most people think of digital currency, are from the economic and financial perspective, rarely from a technical perspective, its principle.
First talk about the evolution of digital currency. In fact, digital currency from the beginning of the last century in 70s and 80s, and now has a history of nearly 40 years. “Digital currency” father DavidChaum wrote an article in 1982, has proposed a anonymous and untraceable electronic money system theory, which is the earliest digital currency. In 1990, he founded DigiCash, and developed E-Cash currency, the real cause of the industry of digital currency interest. There is a book called “out of control”, the author thinks that DavidChaum has changed many people’s idea, he is said to Chaum worship is a bit like a lot of people to worship Jobs. When we received this topic is from E-Cash onwards carding, rather than from bitcoin, bitcoin is just a link in the middle of the.
The basic idea of Chaum is traditional, his model is the common mode of the three party. What is the three party model? One is the bank, is one person, one is business. From the abstract sense, the relationship between the three parties, namely the customer cash payments to merchants in the bank, merchants bank deposits. Further research, such as group blind signature, for example, even bargain offline transactions, such as currency division and so on, are launched on this basis. UnionPay is four mode, the bank card organizations and commercial bank terminal division, is actually a traditional three party model variants.
A study on the most important of all, is how to improve the safety and efficiency of the three party model, reduce the cost. But in the new century, Nakamoto bitcoin development the three party model has undergone a fundamental change. Before either ecash, emoney or other typical systems, a sense did not win so much like bitcoin attention. Bitcoin breakthrough where?
Although we are here today to say in the digital currency and virtual currency concept, but Nakamoto himself did not mention the digital currency and virtual currency, called “his thesis topic: bitcoin electronic cash system” a point of the research orientation is a new idea of electronic payment of. Nakamoto So’s intention is very clear, he put forward a completely through point to point technology of the electronic cash system. But the meaning of this sentence is revolutionary: the original research is the three party model, after the three party model can subtract a ring, into two party transactions, to barter the earliest point in the deeper meaning. People used to do through the trials of a long journey to point-to-point transaction, but now through advanced technology can not rely on trust intermediary and rely on open the books to achieve. Therefore, Nakamoto is the breakthrough point of the transaction, this is a real breakthrough, from the three party to the two party mode mode is the nature of change.
Such a change, make everyone autonomy in payment behavior is greatly enhanced, so it has a great influence on the whole society.
2 theoretical basis, digital currency
From the financial point of view, many people have linked with Hayek’s theory of bitcoin, IMF’s report also mentioned this point.
I have no objection to the hook. But private bitcoin monetary theory and Hayek are essentially different. Hayek called on and hope the private currency has two basic premise. The first is to have full competition, competition will make the best money coming; second, win in the competition of the currency, is a group of the price of raw materials as a commodity for standard (commodityreservestandard) foundation. This commodity standard or “price index standard” (tabularstandard) can operate automatically, so the operation can be entrusted to the private. Because it is in accordance with a pre selected set of goods to measure, so the issuing agencies will be forced to maintain a stable currency value. This is not just private monetary theory with machine algorithms or imaginary things can issue currency.
We are the first to discuss this matter, on how to define the concept of. Electronic money is the earliest we accept, this is a currency support, but like the TV signal from the analog signal to digital signal, we have from the concept of electronic digital electronic money go to, now don’t seem to mention.
Said virtual currency also has some truth, the virtual and the real world is opposite, but in fact the network world is not a virtual world, but the reality of the world. If it is not from behind the assets support point of view, I am in favor of bitcoin is the concept of virtual currency, at least more than false money. The problem is, once bitcoin from the virtual world to the real world, behind the support with no assets highlights. In a sense, the so-called “bitcoin mining” is essentially an attempt to calculate the “labor” reached extortion of human wealth — that is a strange variation of “labor” theory of value? Of course, it does not seem to hinder the function of bitcoin as tokens.
Based on the digital currency can be divided into account and not based on the accounts of two.
When we make our own internal discussions, proposed based on the account (“account-based”) and wallet (“wallet-based”) based on the concept, so some people think that the wallet is the account that beg to differ. At this point, I BenBroadbent and deputy governor of the Bank of England the article slightly different view. The electronic wallet is similar to the safe deposit box, this box can not only use their own keys, but also through the intelligent contract authorized others took the key; and the control box get to the root of the problem at the user end, commercial banks may not have the right to open. This and the original account system is not exactly the same, not equal to the traditional account concept, it will affect our understanding of digital currency and related design.
Many people may want to learn some ideas in the design of digital currency on central bank, in fact done in principle has been explained clearly:
Technical route of “digital currency can be divided based on the account and not based on account of two, can also be used to coexist and stratification.” When we first started to contact the digital currency, there are two models. The first is the central bank directly to the customer, the second is two yuan structure of commercial banks. As you can see, the central bank announced that two yuan, and the UK is quite similar to RSCoin. At present, this may be a better choice.
3, research on several key points of digital currency
The design of digital currency is not an entirely theoretical category of things, it is also the need for verification in practice. Now the digital currency circle inside, even the advocates of open source, but there are a variety of programming languages, the main direction is different, the capital and technology in the competition. For us the need of theoretical research and business research, but in the actual operation process, consideration will be more.
We believe that we should do the following:
First, to clarify the concept, definition and classification of digital currency, function, characteristic, proposed digital currency Chinese definition. Don’t be narrowly understood as bitcoin is a digital currency, we have from the private digital currency up to the statutory digital currency such a perspective to examine this problem completely. To distinguish the legal relationship and the similarities and differences between digital currency and private digital currency in the technical and economic characteristics and institutional arrangements, to discuss the process of digital currency fulfill the functions of money, and how to meet the conditions of high quality monetary system.
Second, the need for digital currency operation in-depth study, explore the withdrawal mechanism of the central bank, commercial bank two yuan issuance and circulation system, and based on digital currency transactions. On this basis, discussed to meet the technical route and key technology of the operation mechanism of the choice, to carry out research and breakthroughs in key technologies. In a sense, the central bank alone to do this thing is incompetent.
Since our implementation is two yuan structure, commercial banks will need early intervention. BenBroadbent this paper describes a kind of extreme situation: when the economic situation is not good, we have to put money in the wallet from the commercial bank. This will lead to a run phenomenon, leading to collapse. After I saw this deduction, the first thought is the design of the electronic wallet whether there should be the upper limit to prevent this from happening. However, the central bank can own all risks to clear? To do this, is the risk control system is very important, in this regard, commercial banks as an important part of the risk control of their own to understand more deeply.
I think Chinese payment environment is relatively developed, but the development of digital currency is deeper. On the one hand, the design of digital currency itself should be concise and efficient; on the other hand, the commercial application of digital money as much as possible to the market to do. Of course, the standards of good. Now, IBM OBC Ethernet Fang, in smart contracts under a lot of effort, but I think it is not necessarily a digital currency itself, digital currency will certainly carry smart contract features necessary, but need to be so complicated?
Third, is the role and impact of digital currency on monetary and financial system to study. Bitcoin now what is means of payment, currency, or commodity? This problem has been controversial, governor Zhou said it is similar to the stamp, I think there’s a reason. Compared to the dollar Renminbi such a huge monster, bitcoin is a very small volume. But if the central bank issued a digital currency, it will be very different. We want to focus on the application of digital currency for payment system security and efficiency, reconstruction of the existing retail payment infrastructure and payment system and coordination.
Now, whether it is bitcoin or block chain, are trying to expand their territory. For example, lightning network design, the main chain gradually sinking as application level RTGS, micro payment will go up for lightning network; such as the mixed database research, the traditional database and the database based on the combination of block chain. For us, if we consider the application block chain, we should consider with traditional payment boundary in what place? Both in what way will fusion? With the traditional methods of payment is two skins, in apple trees grafted on a pear, or the apple tree into a pear? Apple and pear trees and how the interaction?
As a new form of currency, to focus on the study of digital currency to change, the central bank and commercial bank balance sheet currency supply and demand, currency level, interest rate, monetary policy transmission mechanism.
Fourth, scientific top-level design digital currency supervision form based on the above research results, including the development and design of digital currency, to develop appropriate regulatory coordination tools, select the appropriate regulatory control index. Supervision should be to what extent? Like just a few of the teachers said, anonymity is very important, a recent article DavidChaum made a further study on anonymity called cMIX, is actually a hybrid network, proposed how to achieve anonymity while the technology conditions, and under certain conditions to allow law enforcement agencies to put the bad guys out. When we do research on the digital currency, has actually done this, but because of the limitation of technology, we are more design in the system.
4, key cryptography
Digital currency to be successful, some conditions are necessary. Borrow the words of DavidChaum, a new currency in order to survive, must first have the very deep thinking of money. Secondly, we must understand the cryptography. Nakamoto So. Where? He used the block + chain design products, through the hash function and hash chain data structure and other means to ensure the consistency of distributed books; take the digital signature mechanism of non symmetric cryptographic algorithm based on elliptic curve in the identification and transaction confirmation, in order to guarantee transaction security under distributed environment. His doublehashing design is profound, not redundant, some people even think that can resist the attack of quantum computers. So, if you don’t work in cryptography, the system will appear a lot of problems. Third, Chaum think it must be self consistent in theory. Fourth, to have enough power to develop ideas into products. Fifth, encoding ability. Sixth, to have enough social ability, can establish a successful community around this product.
For us, the “community” is small in terms of two yuan system said before, since all parties involved, and even can be said to be the whole society, we need the support of. In view of the rapid development of technology, in the basis of our benefit by mutual discussion, must also be considered in advance, technology upgrading, development concept from the initial introduction of long term evolution.
When it comes to money, with awe……