On April 16, at the 2022 Tsinghua Wudaokou global financial forum, Zhou Xiaochuan, President of the Chinese Financial Society and former president of the people’s Bank of China, said in his speech that if third-party institutions also want to do digital currency or participate in payment systems, they should approach high standards to varying degrees and should not be clever. The stable currency does not claim to be a stable currency. There should be a series of condition assessment to explain whether it is a stable currency. The development of large technology companies and technology finance companies is promising. They have great prospects in the payment industry, but they should keep up with high standards.
Some people believe that the central bank’s currency is stable, while the money in the commercial bank account is commercial currency and does not have 100% stability. Zhou Xiaochuan questioned this view. He believes that, first of all, the currency of commercial banks or the funds in their accounts have a high degree of stability, of course, it is not 100% stable. However, the central bank’s currency itself is not necessarily 100% stable in the real sense, because the stability and instability of the central bank’s currency also depends on the purchasing power. Therefore, it is not necessarily the most reasonable to take the central bank’s currency as the coordinate.
Zhou Xiaochuan believes that if commercial banks want to issue M0 or third-party institutions want to issue currency, the key lies in whether it meets high standards. For example, a high capital adequacy ratio is required; Commercial banks require deposit reserves and clearing reserves; There should be a deposit insurance mechanism to ensure payment in liquidation; Strong supervision and requirements for transparency; We should maintain good corporate governance.
“You said that those standards are too high and the cost is too high. I avoid them. Neither this nor that. As a technology company, I don’t follow your standards, but if you break away from these standards, there may be problems with your stability. In addition to your own stability, it also affects the stability of the whole system.” Zhou Xiaochuan said that if third-party institutions want to innovate and want to do digital currency or participate in the payment system, they should move closer to high standards to varying degrees and should not be clever.
At present, there are many innovative attempts for stable currency, such as bitcoin. But in Zhou Xiaochuan’s view, the judgment of these digital assets and digital currencies lies in whether there are factors supporting stability behind them and whether they really have 100% reserves? Where are the reserves? Are there any certificates and audits? If it is used by the asset side, how about the safety and liquidity of the asset side? Is it subject to strict supervision? Have you considered stress testing under adverse conditions? A series of questions need to be answered.
“We should not easily shake our trust in the account funds of commercial banks.” Zhou Xiaochuan said that the stable currency does not claim to be a stable currency. There should be a series of conditions to assess whether it is a stable currency. The development of large science and technology companies and science and technology finance companies is promising. They have great prospects in the payment industry. However, they should pay attention to integrity, do not play tricks, improve their quality and keep up with high standards.
Whether the central bank should speed up the issuance and issue more digital currencies. Zhou Xiaochuan believes that the amount of money printed can be decided by himself, but whether it can be circulated depends on the application. The central bank must make the issued currency truly available in the market, especially in the retail market. In fact, only when the market has demand for money can the central bank send it. From the perspective of Lbx Pharmacy Chain Joint Stock Company(603883) , we should focus on whether Lbx Pharmacy Chain Joint Stock Company(603883) is willing to put digital currency in the wallet.
Whether the digital currency should be legislated first has international standards. Zhou Xiaochuan believes that the people’s Bank of China is responsible for issuing RMB, managing the circulation of RMB, and maintaining the normal operation of the payment and clearing system. Therefore, there is no legal obstacle to digital RMB, while the third-party issuing token currency needs legislative support, which first needs to meet high standards.
