Fed Chairman Powell said in a panel discussion on digital payments at the International Monetary Fund (IMF) annual meeting on the 19th local time that the Fed has not yet made a decision to issue digital currencies, but is committed to a careful, serious and comprehensive assessment of the central bank. The potential costs and benefits of digital currency (CDBC) to the US economy and payment system. Powell said that CBDC can improve the payment system in many ways. He also said that “for the United States, doing the right thing is more important than being the first.” According to recent analysis by US media, the US is adjusting its previous caution with digital currencies. Attitude, in the world, multi-national central bank digital currency research is entering the fast lane, and China is at the forefront of the world in the research and application of central bank digital currency.
The Fed’s cautious attitude is changing
“Fed officials’ attitude towards digital currencies has changed a lot from their previous cautiousness, and they have begun to conduct a comprehensive study on whether the currency is suitable for the United States.” Bloomberg reported on the 19th that in August this year, the Federal Reserve announced that it is expanding its relationship with digital currencies. Related technical experiments. Not only that, the Boston Federal Reserve is collaborating with researchers from the Massachusetts Institute of Technology to develop a virtual digital currency for the central bank. However, the interest of Fed officials in digital currency came too slowly. After Facebook proposed to provide its users with its own digital currency Libra, the interest of Fed officials began to heat up.
The report quoted Powell as saying that any digital currency should be a supplement to cash. Regarding the digital currency Libra launched by Facebook, Powell said that he agrees that “the currency emphasizes the need to improve cross-border payments and has generally successfully focused people’s attention on payment-related issues, including consumer protection and network security. And privacy.” The report pointed out that digital currency may change the way monetary policy plays a role in the economy and speed up the operation of the payment system. The current payment system in the United States lags behind many countries. Not only is the speed slow, but consumers will also be charged a certain fee for using the payment system.
Japan launches test next year
According to a Bloomberg report, many central banks in the world are currently studying whether their sovereign currencies should have digital currencies. The Deutsche Welle website reported on the 19th that the European Central Bank announced in early October that it would make a final decision on the launch of a “digital euro” in 2021. A report by the European Central Bank stated that the “digital euro” may provide citizens of the euro zone with a safe form of currency. The issuance of the “digital euro” is conducive to supporting the digitalization of the European economy and the strategic independence of the European Union, in response to the significant decline in the role of cash as a means of payment. It can also be used as a new monetary policy transmission channel to reduce the risk of conventional payment services and enhance the international status of the euro. Improve the total cost of currency and payment systems, etc.
The Central Bank of Russia said on the 19th that avoiding economic sanctions will be one of the reasons for launching the central bank’s digital currency backed by the ruble. The “digital ruble” may help reduce the Russian economy’s dependence on the U.S. dollar and help reduce the country’s risk of foreign sanctions.
Earlier, the Bank of Japan, the central bank of Japan, announced on October 9 that it would launch an empirical test of digital currency in 2021. The Bank of Japan stated that it currently has no plans to issue digital currencies, but is promoting the establishment of a mechanism that can respond to the progress of digitalization.
Earlier this month, the Bank for International Settlements (BIS) and the Federal Reserve, the European Central Bank, the Bank of England, the Swiss National Bank, the Swedish Central Bank, the Bank of Japan, and the Bank of Canada jointly issued a joint document entitled “Central Bank Digital Currency: Basic Principles and Core Features ”Report, expounds the common basic principles and core features of general CBDC. The report pointed out that in order to develop and pursue public policy goals in the digital world, central banks are actively studying the pros and cons of providing digital currencies to the public. Published research, policy work, and proof of concept from central banks of various countries have made great progress in identifying potential benefits and risks.
Shenzhen trial digital RMB consumption
“China is at the forefront of the development of digital currency.” An article published last week in Forbes magazine stated that the Chinese government has been committed to promoting the internationalization of the renminbi in recent years to challenge the “dollar hegemony.” China has increased the frequency of using the renminbi as the central bank’s reserve currency and has further expanded the scope of the use of renminbi in international trade. “Most notably, China may become the first major country to introduce a sovereign digital currency, which is advertised as a technologically superior form of currency.”
“Imagine if the’digital renminbi’ of the People’s Bank of China succeeds, both physical currency and online payment may be eliminated.” Deutsche Welle’s website reported earlier this month that the “digital renminbi” can realize contactless real-time payment, and the scope of application is wide. Covers shopping in stores and repayment of debts between people.
“Forbes” magazine article believes that China has been leading the development of central bank digital currency. As of October 5 this year, “digital renminbi” has been used for transactions worth more than 1.1 billion yuan. In the latest pilot project, Shenzhen City will issue “digital RMB” to residents through a lottery to be used by some local businesses. According to the latest data from relevant departments in Shenzhen, from the beginning of the event at 18:00 on October 12th to the end of the event on October 18th, a total of 47,573 successful individuals successfully used the “digital RMB” red envelope transactions for 62,788 transactions with a transaction amount of 8.764 million yuan.