2. The internationalization of the CNY
Regarding the internationalization of the CNY, the white paper mentioned that although e-CNY can be used across borders technically, the current design of e-CNY is mainly for domestic use. In the future, the central bank will adopt G20 or other international Organize to explore the possibility of e-CNY cross-border use.
The expression of the internationalization of the CNY in the white paper is very low-key. However, with the development of China's economy and the development of some international multilateral trades, it should be said that e-CNY has great potential in the internationalization of CNY.
At present, the banking industry all over the world is trading with SWIFT , which is dominated by the United States. Theoretically, the United States can use this influence to weaken the opportunities for other countries to enter the global financial system. This year In March, when Russian Foreign Minister Lavrov began his visit to China this week, he called for Russia and China to reduce their reliance on the U.S. dollar and Western payment systems.
To this end, China has developed the RMB cross-border payment system (CIPS), an alternative to SWIFT. However, since theRMBi is not popular in the world, most cross-border transactions in China are still settled in US dollars through the SWIFT system. E-CNY can obviously play a great role in the popularization of RMB in the world, and then it can be used for international settlement and even international reserves.
3. Effective implementation of monetary policy
The central banks of all countries have been facing a problem for a long time, that is, monetary policy may not be well implemented.Since the COVID-19 outbreak, central banks have been trying to stimulate the economy by printing money, but it is difficult to control the effect of printing money.From the perspective of stimulating consumption, the money printed by the central bank generally hopes that people can take it out for consumption. If people receiving subsidies use the money to buy stocks, speculate in real estate or speculate in currency, it is exactly what the central bank does not want to see.
In recent years, with regard to stimulating the economy, the State Council’s formulation is not to engage in "overflow irrigation" but to engage in "precision drip irrigation", but if there is a lack of effective tools, "precision drip irrigation" may not achieve the desired effect. Take business loans as an example. Since last year, in order to alleviate the impact of the new crown pneumonia epidemic on the economy, the government has increased its financing support for small and micro enterprises and private enterprises. Major banks have thrown out low-interest operating loans, and even directly discounted operating loans. Under the special policies during the epidemic prevention and control period, the operating loan cycle has become longer and longer, up to 20 years. The original intention of operating the loan business was good, but some people took advantage of the opportunity to buy a house with the money from the operating loan, enjoying a lower interest rate and a longer repayment period.
In recent years, to stimulate the economy, the State Council has proposed "precision drip irrigation" instead of "flood irrigation". However, without effective tools, "precision drip irrigation" may not achieve the desired effect.For example, novel coronavirus pneumonia has increased financing support for small and micro enterprises and private enterprises since last year, in order to alleviate the impact of the new crown pneumonia epidemic on the economy. Under the special policy during the period of epidemic prevention and control, the operating loan cycle is getting longer and longer, up to 20 years.The original intention of operating the loan business was good, but some people took advantage of the opportunity to buy a house with the loan money, enjoy lower interest rate and longer repayment period.
With the help of the smart contract function of e-CNY, monetary policy will receive better results. For e-CNY, the time limit and whereabouts of spending can be restricted, and the flow of funds can also be accurately tracked. Therefore, the problem of currency "from real to virtual" can be solved to a certain extent.
E-cny can solve many problems, but it also faces certain challenges. For example, Quiles once said that one of the difficulties in developing CBDC is that it will provide more opportunities for network attackers. Considering that the Internet eliminates the boundaries of attacks, it is likely to encounter more attacks, which is one of the reasons why he opposes CBDC.Threats from the technical security level obviously exist for e-CNY, which must be tested for enough time to ensure the security and stability of the system. Therefore, before large-scale application, e-CNY should have a long test process.
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