Beijing Business Today has been reprinted by Chinese media Shina that PBoC (People’s Bank of China) has started its efforts to issue digital currency since 2014 and that it is “ready” to deploy it. It became clear in the report.
Medium countries might issue a digital currency for the first time in the world.
PBoC’s digital currency project officials who are “ready for digital currency issuance” disclosed part of the concept to the Chinese media.
What is the “two-tier system” for central bank coins?
According to Mu Chang Chun, head of the PBoC payment and payment department, the bank’s planned digital currency will adopt a “two-tier system”.
This is different from the “one-tier system” where the central bank distributes coins directly to consumers. Coins are first distributed to domestic commercial banks and other financial institutions, and then the digital currency is in the hands of consumers.
According to Mu, commercial banks can act as intermediaries to “reduce risk” in digital currency projects.
In addition, Mr. Mu said that PBoC will issue a digital currency to “reduce waste” in traditional banks and “change fundamentally the existing money supply model that is used to prevent money laundering”.
Notable points of China’s central bank coins are that it is intended to be “anonymous and portable” as a substitute for cash and that it is completely dependent on blockchain. It ’s not. ”
Wang Pengbo, the senior financial analyst, said the central bank coin issue on the clearinghouse, said:
There is a possibility that the relationship between the conventional payment and the clearing house is destroyed by the new technology, and as a result, the role of the clearing house acting as an intermediary may not be so much.
In addition, according to Shao Fujun, UnionPay chairman who acts as a payment clearinghouse, there are two possible scenarios for the impact of digital currency.
In one situation, a blockchain covers the entire digital currency issuance and distribution process under a two-tier system of central and commercial banks. Because the transfer of the entire transaction is completed directly by the blockchain network contract, the payment clearing house is discarded. In another case, the proxy issuing authority issues digital currency and sets its own logo.Payment clearing houses will reform existing networks to support digital currency transfer and settlement. A reserve is paid to the central bank to obtain digital currency, and the issued digital currency becomes the responsibility of the agency. This is similar to the current situation, adding another currency to the existing bank account.
Recently, the common sense of money has changed significantly since the birth of virtual currency, but the focus is on the impact on existing payment services and commercial banks that digital currencies issued by central banks.