2021年10月26日

Will paper money disappear? How digital money has come into our lives

BEIJING, March 21 (Xinhua) —

Xinhua News Agency reporter Liu Xiacun

A kind of “new” money is on the way — the recently released outline of the 14th Five-Year Plan clearly points out that the research and development of digital currency should be steadily promoted.

Will digital money replace paper money? How about the prospect of China’s digital currency? What convenience can it bring to our life? In response to the concerns of all parties, at the China Development Forum 2021 Annual Economic Summit held here, a number of domestic and foreign financial experts gave a detailed interpretation.

Following Shenzhen, Suzhou, Beijing and other places, recently many Chengdu citizens also received the “digital RMB red envelope”, the digital RMB gradually into the field of vision of more people.

“At present, the digital RMB pilot tests are progressing steadily.” Mu Changchun, director of the People’s Bank of China’s Digital Currency Research Institute, said at the economic summit.

The so-called digital RMB is a legal tender in digital form issued by the People’s Bank of China, which is equivalent to paper money and coins.

“While more than 60 countries are experimenting with national digital currencies, China’s digital currency e-payment program is the most advanced central bank digital currency program,” said Myron Scholes, a Stanford University professor and Nobel laureate in economics who attended the economic summit online.

“China is already one of the global leaders in the development of digital currency, and your successful pilot and cooperative open model has fully demonstrated the infinite possibilities of digital currency, especially its positive impact on financial inclusion.” Said Daniel Shulman, president and CEO of PayPal.

As for digital RMB, some people worry that the central bank has access to users’ transaction information and infringes on users’ privacy, while others believe that the anonymity of the digital RMB will make it a criminal tool.

So what is the truth?

“Digital RMB has the highest level of privacy protection among the existing payment tools.” The current payment tools, from bank cards to WeChat and Alipay, are all tied to the bank account system, and bank accounts are opened with real names, which cannot satisfy the demand for anonymity, Mu said. “The digital renminbi is loosely coupled to a bank account, which technically enables small amounts of anonymity.”

At the same time, he also said that “controllable anonymity” as an important feature of digital RMB, on the one hand, to protect the public’s reasonable anonymous trading and personal information protection needs, on the other hand, is also the prevention and control of money laundering, terrorist financing, tax evasion and other illegal and criminal activities, to maintain financial security objective needs.

“If the anonymity of digital RMB is too high, it may also be targeted by criminals and become a tool for illegal transactions such as pornography, gambling and drugs. Digital RMB adopts the design of ‘small amount anonymous, large amount traceable’, also hope to let people feel at ease, if the use of digital RMB telecom fraud, can help people to recover their money.” Mu Changchun said.

You may ask, besides the fear of losing your parents to telecom fraud, what other changes can digital currency bring to our lives?

Myron Scholes believes that the yuan’s digital currency will make the yuan more attractive internationally and facilitate the efficiency of cross-border settlement. At the same time, innovation in the financial and business sectors will accelerate, as digital currency will enable faster transaction speeds in all financial transactions, personalized solutions and more flexible implementation will be possible.

“The use of digital currency is no longer an issue, but timing, as the global epidemic crisis causes consumers around the world to adopt new habits, they are giving up cash, and businesses are responding.” Ultimately, the development of digital currencies will help improve the financial health of people, families and businesses around the world, says Daniel Shulman.

Nouriel Roubini, a professor at New York University in the United States, also believes that China, the euro zone and other countries are now undergoing the transformation of digital currency, which is an international trend.

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