Digital currency how far away from us?
In recent years, with the emergence of bitcoin blockchain, application technology in the financial sector has aroused widespread concern from all walks of life, including the central bank. Then the digital currency actually from our daily lives far?
What is money
Currency CCY (Currency) is essentially a kind of market contract on the right owner and the exchange, is fundamentally agreed between the owner. I use my all to the market, for all I need is a process of monetary agreement, it reflects the individual and social economic cooperation. The contract nature of the money currency can have different forms, such as the general equivalent of precious metal currency, currency, electronic money etc.. It can be used as a medium of exchange, store of value and unit of account.
What is a digital currency
According to the definition of the European Central Bank (virtualcurrencies), virtual currency is the issue of non central bank, credit institutions and electronic money institutions, in some cases can be used as money substitutes the value of digital performance. As with electronic currency, virtual currency is invisible, the most important difference between the two is the issue of the different.
Electronic money is electronic currency, including our common bank cards, online banking, electronic cash, and in recent years the development of the third party payment, such as Alipay, caifutong and so on, these electronic money regardless of its form, through which institutions circulation, its origin is the currency issued by the central bank.
Virtual currency is illegal electronic currency, the issuer is not the central bank, the virtual currency is in circulation in the virtual environment in particular; after bitcoin, the block chain technology solves to the center, to the issue of trust, to achieve a global circulation, to be sought after in the range a wide. In order to facilitate the discussion, electronic currency and virtual currency, called digital currency.
Digital currency is not the currency (legal)
In the world, the most famous is the digital currency bitcoin may, in addition to the “Wright currency” Dog Coin “and Chinese folk” gold coins “. However, these are not the focus of digital currency issuer, anyone can participate in manufacturing, and in the global circulation. Our future is by the central bank to release digital currency. Experts said that China digital currency circulation and transaction, should follow the traditional currency and digital currency integration ideas, the implementation of the same principles of management.
What are the advantages of digital currency
As early as 2014, the central bank will study digital currency on the agenda, set up a special research team, and further enrich the power at the beginning of 2015, the digital currency and operational framework, digital currency key technology, digital currency circulation environment, digital currency facing legal problems, digital currency on economic and financial system the influence of in-depth research, has achieved initial results.
The central bank said that the issue of digital currency can reduce the traditional currency issue, circulation cost, convenience and improve the transparency of economic transactions, reduce tax evasion and money laundering and other illegal and criminal behavior, enhance control of central bank money supply and monetary circulation, better support for economic and social development, fully realize the power of inclusive finance.
“The issue of digital money will make the economy of our country has certain programmability, the economic and financial regulation will have a more clear direction, the whole network accounting mode and distributed digital currency implemented, will effectively promote China’s economic credibility.” In the opinion of Professor Huang Zhen of Central University of Finance and Economics School of law, digital currency is the renminbi is conducive to “go out”, along with the global financial infrastructure reform, in promoting the realization of digital information technology finance.
The expert explained, compared to digital currency notes, have obvious advantages, not only can save the circulation costs, but also improve the efficiency of trading or investment, convenience and improve the transparency of economic transactions. Digital currency issued by the central bank also ensure the integrity of the financial policy coherence and monetary policy, but also to protect the safety of currency trading. In the digital currency security, regulatory and other issues, the central bank has also taken into account. The central bank will cooperate with the financial sector, science and technology, to further increase the research of various innovative technology and reasonable utilization.
In addition, the convenience and transparency of issuing digital currency can also enhance economic transactions, reduce tax evasion and money laundering and other illegal and criminal behavior, enhance control of central bank money supply and monetary circulation, better support for economic and social development, fully realize the power of inclusive finance.
What are the digital currency to be to solve the problem
Zhou Xiaochuan said that the central bank will use a variety of means of information technology, including cryptography, digital currency to protect the unforgeability. The technology of the future will be upgraded, we will consider in advance, technology upgrading, development concept from the initial introduction of long term evolution. Digital currency as legal tender will be issued by the central bank. The central bank said, digital currency circulation and transaction, should follow the traditional currency and digital currency integration ideas, the implementation of the same principles of management.
Insiders predict that the next period of time, the digital currency will coexist with money. This situation will lead to people in the hands of money shrink? Experts pointed out that because of the issue of follow the idea of integrated with the traditional currency, so don’t worry about money will shrink. Financial Law Institute of the Central University of Finance and Economics Institute of Huang Zhen said that the digital currency mainly refers to the form of currency, currency will not shrink. The currency issue is still controlled by the central bank.
Although the digital currency is imperative, but has not issued a clear timetable. Indeed, the digital currency is also facing the science and technology, circulation environment, legal problems such as a large wave problems to be solved, such a huge project completed. Now the issue of digital money is still in the discussion stage, is the innovation mechanism of the value of a currency symbol, a lot of problems in the study. However, it has been in practice more and more tend to the use of electronic banking, electronic payment, rather than carrying paper money. Under this trend, after the circulation of money will decrease.
From the medium of exchange, the virtual currency has not been widely used, such as bitcoin is only in a very small range as a means of payment. From a store of value, as the representative of bitcoin large virtual currency price volatility, but also the lack of other features of modern currency, such as not in the bank interest; the lack of security mechanisms like deposit insurance the same; not in loans, credit cards and other daily financial activities have been widely accepted and used. From the unit of account, as it hinders the accounting unit of sharp fluctuations in the price of bitcoin. Another obstacle is the price of bitcoin is too high, which brought trouble to the price of goods. Overall, the virtual currency at this stage has certain characteristics of the currency, but not enough to become widely accepted currency.
How the future trend of digital currency
In the future, the advanced form of digital currency now may be beyond our imagination, in the foreseeable future, the currency of the world could be a lot of “coexistence” in the world.
Legal tender (national credit) and private money (private credit) coexist; traditional bill (visible) and digital currency (invisible) coexist; the role of the central bank in the money supply, as issuers also act as the supervisor in the final liquidation, which provide clearing services, but also for other institutions to conduct supervision of liquidation. Therefore, money is very important in the economic and financial position. The evolution of the form of money reflects the change of the economic, financial and technology; in turn, change the form of money will also impact on the economic and financial.
The evolution of the form of money is the interaction of supply and demand results. From the demand perspective, the economic development requires the form of money. From the supply point of view, the development of technology makes possible the evolution of monetary form. With the process of digital virtual currency already exists objectively, the future of digital currency will be more and more big.
At this stage of the virtual currency currency has certain characteristics, but not enough to become a widely accepted currency. There are three key problems about currency: whether there is monetary value, who will issue the currency, how to adjust the quantity of money. Digital currency to further enrich the discussion of these three questions. Block chain technology of digital money behind its also poses a challenge to the government agencies and commercial organizations. The era of digital currency financial system and perhaps not the same as now. Digital currency, may provide another way to solve the international monetary system Triffin dilemma. If there is no mandatory limit and bad money good money exchange rate, competition will lead to good money drives out bad results.
To sum up, the future may not have money, the financial industry will be digital, which is a big trend. But to achieve the digital currency is not easy, there are many technical problems to be solved, digital currency substitution notes, there is a very long process. So, in the short term, money will continue to exist.