Travelers traveling across the country from north to south (e.g. from Shanghai to Beijing) often experience culture shock due to small differences. For example, the difference in monetary form of one dollar. One yuan in the south is mostly jingle and heavy coins, while one yuan in the north is mostly banknotes.
There are many opinions circulating on the Internet about the reasons for the difference between the two:
It is said that the north is dry and the south is humid, so coins that are not prone to mold are more popular in the south.
Second, when the country gradually implemented the "small denomination currency minting policy", it established many pilot cities in the south, which affected the usage habits of local residents (the first batch of pilot cities in 1992: Shanghai, Liaoning, Zhejiang, Shenzhen, Jiangsu) .
Third, three of China's four major mints (Nanjing, Shanghai, Shenzhen, and Shenyang mints) are all in the south. Therefore, from the perspective of transportation costs, self-produced and sold products are the most cost-effective.
Low value coins cost less than paper money |
The above three statements each have their own basis and have the same common characteristics, and are not mutually exclusive. Some data show that due to reasons such as easy breakage, the cost of a one-yuan banknote in circulation for 20 years will be 15 times higher than that of the same type of coin. Therefore, it is logical for the country to implement "mintification of small denomination currency". Therefore, cities with the longest promotion time, cities with opportunities to transport coins at low cost, and cities with natural environments that are difficult to adapt to banknotes will naturally accept this reform earlier and longer and form a habit.
It can be seen that economic costs are an important driving force for the country to implement certain policies, and the factors that lead to the formation of customs and habits are more complex and diverse. Here we simply summarize these factors as social atmosphere.
Likewise, we can use this simple logic to try to understand digital currency (DCEP).
Putting aside complex technical terms and difficult-to-understand implementation logic, digital currency is about digitizing cash. So, the question is, why digitize cash?
Seeing this, you can definitely get inspiration from the currency promotion policy. Compared with traditional cash, digital currency can reduce the costs of cash issuance, printing, maintenance and storage, simplify multiple levels of cash circulation, whether open or concealed, and reduce its carrying costs and anti-counterfeiting costs. But there will also be dissent. Because digital currency is an emerging system, its maintenance costs may be immeasurable until it is widely adopted. No one can guarantee whether digital currency will be successfully implemented and popularized in the future.
Mobile payment makes our payment methods more convenient｜
However, as a policy that the country is vigorously promoting, digital currency must have a carefully drawn economic blueprint. If it is difficult to distinguish the pros and cons from the "supply" perspective, then let's change our thinking and think from the "demand" perspective. Do countries and we need digital currencies? Why is it needed?
Speaking of this, everyone will definitely think of WeChat payment and Alipay payment. They provide great convenience for our life and work, and also promote economic development to a certain extent. However, although WeChat and Alipay are electronic payment methods and appear to be "digital", in fact they are only third-party payment tools and not digital currencies.
In terms of a simple business relationship, when we deposit money into a third-party payment instrument, although it looks and feels like cash, we actually have a lending relationship with the third party. Currencies are divided into several levels based on differences in money supply, and liquidity decreases as levels increase. Roughly speaking, M0 refers to cash in circulation, M1 refers to M0 plus demand deposits, and M2 refers to M1 plus quasi-currency (time deposits, other deposits, etc.). The currencies in monetary funds such as Yu'e Bao belong to M2, not M0.
If we simply understand monetary liquidity as transaction volume, then if the total amount of money remains unchanged, the greater the monetary liquidity, the faster GDP growth will generally be. On the contrary, when liquidity becomes poor, if you want to prevent GDP from falling, you must increase the total amount of money, that is, print money. Printing money causes inflation, and letting inflation cause economic collapse. Therefore, from a macro perspective, the country must continue to promote currency liquidity to control the development of inflation.
It is undeniable that M2 such as WeChat and Alipay have ridden the wave of the mobile Internet era, promoted the user habits of mobile payment and non-cash payment in my country, and created a digital economic atmosphere at the grassroots level. However, the liquidity of M2 comes from M0, and it cannot surpass M0 in terms of liquidity. Moreover, their liquidity may change uncontrollably with economic fluctuations, and the central bank cannot use them to implement monetary policy. In other words, the M2 is good, but not good enough, so what's better?
Digital currency is currency issued by the central bank and is backed by the credit endorsement of the central bank. Like cash, digital currency is classified as M0 in the central bank's classification and has the highest liquidity. M0 will basically not disappear except for being withdrawn and destroyed by the bank. Therefore, if a country wants to fundamentally improve currency liquidity, an upgraded version of M0 that can be controlled by digital currency is obviously a better solution. Moreover, the economic atmosphere of digital payment has become a climate in our country. Naturally, the country must seize the opportunity, follow the trend, and promote digital currency.
For us, third-party payment tools carry the risk of privacy leakage. On third-party platforms, every income and expense is clearly visible. With the exposure of information that cannot be "customized" and the wave of big data, users' consumption behavior and habits are like the bright moon in the dark night, even the craters are vaguely discernible, and there is no privacy at all.
But digital currencies enable anonymous transactions online. For example, digital currency trading is like taking an empty red envelope, which only contains the amount we need. Then we give the empty red envelope to the bank, and the bank deducts the corresponding amount from our account and stuffs it into the red envelope. , and then return it to us. When we pay with a red envelope, the electronic device can automatically open the red envelope and send the money to the transaction person.
In this process, the bank only comes into contact with the red envelopes and does not know what we did with the money or who we gave the money to. Therefore privacy is protected. But of course, unlimited anonymity also has its pitfalls. In fact, the central bank can formulate rules to achieve traceability of digital currency to a certain extent and achieve controllable anonymity to combat corruption, money laundering, fraud and other illegal and criminal activities.
Overall, digital currencies have cost advantages over traditional cash. It can provide more direct channels and wider operating space for the implementation of the central bank's monetary policy, and can also provide strong support to holders or consumers. Credit endorsement and privacy protection. Therefore, for every country, the implementation of digital currency is only a matter of time. For China, our digital trading atmosphere has become a climate, and the promotion of digital currency is the general trend. It’s also a good strategy that’s easy to do and gets twice the result with half the effort.
refer to
[1][Au] Carl Menger: "Principles of National Economics (Chinese Translation)", Shanghai Century Publishing Group, 2005 edition
[2] James Mellick.: Brave New World or Safe Haven? BBC News. [28 2013].
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