DC / EP - Another test to Internationalize the RMB

Borderless Money is a new form of currency that has been offered in recent years, and unlike international currencies, Borderless Money is a carrier of purer value. For a government to be successful in expanding the interests of the country, it must go through a process of transforming its own interests into international interests, not national development.

The renminbi has worked hard to support global currency trading since the 1000s, but with many problems to come, the use of the DC / EP has opened another new window for the renminbi monetary world.

This sentence is a compilation of sentences from the series "DC / EP - Another Trial for the Internationalize RMB".

Finances Without Borders | One of "DC / EP - Another attempt to internationalize the RMB"

Products have no boundaries of digital results | "DC / EP - Another experiment to internationalize the RMB" Part 2

What is DC / EP | "DC / EP - Another experiment to internationalize the RMB" Part 3

internationalization of the yuan | "DC / EP - Another experiment to internationalize the RMB" Part 4

money growth

As a medium of exchanging goods and a medium of exchanging profits, money has become a commodity among the people and has been used all over the world and accepted by the government.

The history of human industry dates back thousands of years and most models of industry are barter. Participants in the exchange exchange their assets directly for other assets without intermediaries. In the next step, luxury is used as a medium of exchange. At this point, things like rocks, seashells, and even tree branches have become an intermediary exchange. Subsequently, in order to maintain the positive effects of the exchange rate, steel combined with stress mining became the focus of the exchange, and this exchange rate was made a model of money.

The real money started to emerge because health care organizations offered credit guarantees for special benefits.At that time, silver was made from one or more precious metals, and it was difficult to advertise the silver because it was very profitable. In order to collect more money when the president is in trouble, the ruler decides to reduce the percentage of key metals in the stock, measuring the results in a disguised form, but the This order is the value of money in relation to modern money. . The process is also less expensive due to the high cost of steel to keep anchoring at a natural cost.

The modern financial system resulted in the complete separation of the dollar and gold, which led to the collapse of the Bretton Woods system.Then the overall value of the product depends on the creditworthiness of the supplier and whether or not the asset is profitable. Although many countries have claimed that the statement was based on national debt or other baskets of national currency, the legacy of those statements still follows. Credit is not enough for some businesses. You can determine the value of the currency. infinite dilution.

Money is sovereign.

Modern banknotes use a storage system, often with paper money as the primary means of transportation, and there is no shortage due to its value. according toThe value of the present value depends on the supplier's credit level.

If you look at the current global currency deposit system, it's a start.Rely on the support of the national bank or the issuance of private companies to approve.In any system, the flow of money is restricted by national credit, and it is also the derivation and manifestation of the sovereign will of the state.

What is a "link exchange"?

The indexed exchange rate system is a stable exchange rate, that is, the exchange rate between the local currency and a foreign currency is fixed.Also called "dollars" when the combined value is in US dollars.

At the same time, there is an increasing phenomenon in the development of modern products.Linked exchange rate system. These procedures are often adopted by some small businesses to support their own business development and use the benefits of connected countries to cover certain financial risks. These countries or regions do not directly receive the best benefits from the connected country, but instead give each other the benefits of exchange rates. This sufficiently shows that the circulation of funds is essential and that the right of withdrawal plays an important role in the regulation of the security of local finances.

The right to strike change for a governing body (country or region) is a symbol of the independence of the country / region, wanting it to leave its own interests, despite unprofitable profits. Independence will determine an advantage of the State An advantage granted by the State cannot be used as a national advantage and cannot be used as an intermediary of exchange between foreign countries (except in areas of high national or political risk) .

What is currency without borders?

There is currently no consolidation for Money Without Borders.To a certain extent, nonprofit benefits are defined as profits or assets that can be traveled to multiple countries without the support of a single national credit.Borderless is not something new that was born with the advent of blockchain or encrypted digital currency.

In the history of the world's monetary development, bronze, silver, gold, ornaments, and even silk and ceramics have all played the role of borderless silver at any point in history, contributing to growth in international trade.

As for the unlimited benefits, there are several important ones:

It has some credibility and some users.The value for money must first be widely recognized and accepted by the users, and as such, the value for money is highly regarded, which makes people want to use these currencies for various business purposes, like industry.

at low price.Basically, there is no charge for a sovereign currency to circulate in an area, but it is impossible to travel in the area. This means that the distribution of multiple allocations must be distributed across the region. In order to have more efficiency margin based on cross-border benefits, the high cost of cross-border benefits should be addressed and improved.

high security.As money has no limits, inevitably there are people who try to "generate" more money by the existing processes through fraud, etc., leading to the appreciation of the currency itself. . As a result, he should be able to fight "illegal" inflation. At the same time, it is necessary to prevent existing problems such as theft of existing funds and to ensure the security of the finances themselves.

It has the ability to control inflation.In a profitable business model, inflation should be equal to or slightly higher than real estate growth so that the strength of the economy is not reduced. In fact, after the collapse of the Bretton Woods policy, the situation was incredible for borderless profits, the purchasing power of the US dollar fell 76%, which can cause serious credit problems.

Delivery is easy.In the existing financial system, the exchange of different currencies is difficult and requires the help of a third currency to change the value, which reduces the value of changes in value throughout the body. In the case of borderless currency, one of the main features is that the transfer and settlement is easy, and users can quickly change or resolve tools by country or region, which is convenient for users.

Why have money without borders?

From the point of view of modern finance, there is volatility and payment of currency gains.The emergence of this value is due to the high exchange rate.Today, with the advent of computer technology, the exchange rate has dropped significantly compared to the early days of production, but the cost of this charge n is neither reduced nor modified accordingly. In a sense, these high prices have become an impact on the future development of the world economy.

Thus, returning to the notion of improving the world economy, the demand for borderless funds has increased, allowing unions to increase the profits of their country, developing the economy instead of paying the exchange rate. .

Also, in terms of market efficiency in the global economy, the existing sovereign monetary system encounters various exchanges of currencies in transactions. For example, Indonesian Rupiah to RMB, Indonesian Rupiah to US Dollar, then US Dollar to RMB. efficiency of international trade.When using currency without borders, there is no such exchange rate system, which can improve the efficiency of the exchange rate in the region.

DC / EP is a digital yuan issued by the People's Bank of China, which is the digital form of the banknote. This is another request from the Chinese government to introduce the international yuan, and it is working to develop a new payment system that is safe, reliable and smart for the world.

Digital Benefits meet the five criteria for unlimited benefits.

Digital advantages have started to take shape in many industries in some countries.The digital advantages represented by Bitcoin bolster its own credibility by accepting a share, and the value of digital advantages such as Bitcoin and Ethereum has been publicly recognized and has been used for modern payments in some countries. .

Digital money has low costs.Digital advantages enhance the value of cross-border flows of national currency. As of October 31, 2019 at 2:27 p.m. Beijing time, 9,013.498 BTC (equivalent to $ 83,150,150) has been traded on two unknown wallets with the exchange rate only being from $ 1.64 to over $ 83 million . .These exchange rates are hardly ever taken into account in the traditional financial system.

The design of digital currency initially included the security of the currency itself.High security issues.Non-repetitive and anti-counterfeiting because digital security is essential for digital advantages in real estate development. Many types of digital currency have created various protections based on the characteristics of the rewards themselves to ensure the security of the rewards themselves.

The rise of digital currency is manageable.Currently, the distribution of digital advantages still depends on strict mathematics and the use of distribution control rules, so that digital advantages cannot be disseminated beyond demand. When a new digital value is created, its capital or net assets. so,Only companies that manage the benefits of digital in the medium term, no inflation that does not respect the rules of digital benefits. In other words, the increase in numerical results is generally controllable.

Digital results are easier to market.Numerical results have the potential to be marketable and markets can be identified when the exchange is identified by a number of identifying information.The anonymity, censorship resistance, irreversibility, and programmability of digital currency itself dramatically simplify the business process and improve the overall speed and stability of the business. Arguably, digital advantages are easier to market than national advantages that already exist.

Not all digital benefits can be unlimited.

The digital benefits statement can be based on accepting a function or type of asset repayment loan, while the difference between developer and anchor cost can divide digital benefits into controls. centralized. and distributed control modes.Because there are so many different ways to advertise, digital rewards can have different, even more valuable, strengths.

Facebook's Libra, for example, defines the basket of currencies as assets, so the value of those currencies is stable.Because the company regularly oversees the decision-making process of the United States, European Union and other regions, and most of the company is based in the United States.After the Libra announcement, the rate will be adjusted against the currency, which will be a way for the United States to export its domestic credit.

Another example is the DC / EP issued by the Central Bank of China, a digital currency issued by a bank, which is at the heart of digital labels.While DC / EP can still be used for cross-border payments, this does not change the status of DC / EP's sovereign fiat.The demand for cross-border payments has also become a way for China to export domestic credit to the outside world.

numerical resultsa pieceIt can be said that this advantage is not needed as it is a way to export domestic loans to foreign countries, not a global trade solution.

What is the CBDC?

CBDC, the full name of Center Bank Digital Currency, is a digital banking company. CBDC is a digital dividend announced by an intermediary bank and has the following characteristics. (1) is the value of digital fiat money;Calculated from M2calibre;(2)It is supplied by the intermediary bank and recycled and disposed of by the intermediary bank.

From this perspective, the CBDC is essentially a sovereign digital currency that uses unlined banknotes.

CBDCs allow central banks to monitor profitability, guarantee legitimate spending, fight against fraud, money laundering, etc.At the same time, central banks can use CBDCs to export domestic loans to other countries through cross-border trade, which facilitates trade around the world.

Currently, in the field of CBDCs, only DC/EP in China has been tested, and CBDCs in other countries are still in the R&D stage. CBDCs have been established in major developing countries or regions of international trade, such as the European Union, the United States United Kingdom, the United States, Japan and Korea.As a result of the analysis, the application of digital advantages reduces export costs and better prevents financial fraud such as money laundering and money laundering.

What is DC / EP?

DC / EP, the political name for electronic payments, is the digital currency for electronic payments. The DC / EP provided by the Company is a digital business with a central board.

China's e-commerce industry has reached a high level of development, and the penetration of electronic payment has reached the highest level in the world. Currently, in the electronic payments industry, Tencent, Alibaba and UnionPay hold more than 85% of the market.However, by agreement, the term of the existing electronic payment system is to transfer existing fiat money to another bank account, which is still surprisingly similar to bank fluctuations, and the history of profits cannot be traced.

DC / EP diffusion is a two-tier model, where the central bank negotiates with a company specializing in the payments division, and the central bank negotiates it with the consumer segment last and put on the second market. Users can make payments through digital wallets at some commercial banks.

As a digital result based on blockchain technology, DC / EP exhibits at least the following characteristics:anonymous, as security based on the exchange rate (2) trade and capital flowstraceability, this traceability is often used by central banks to improve currency security. (3) Payment can be made.smart contract, in order to improve business efficiency, (4) can be used as follows:Cross-border payment equipment; (5) may include:Statistical caliber M2; (6) than old moneyLess advertising / exchange rate.

Applying Perspectives on DC / EP

The DC / EP announcement shows the Chinese government's outlook for the global yuan market, and the state of digital advantages makes the DC / EP promising for wide application.

Support RMB international trade.Due to natural geopolitical circumstances, the international renminbi exchange has always been difficult, and the Chinese renminbi has not yet achieved its legal status in the world.Due to the impact of the traditional settlement and payment process, DC / EP gave the RMB another opportunity to support internationalization.

The transport of smart contracts improves the efficiency of the manufacturing industry.Existing investors are required to pay in accordance with the contract, and the distribution of funds usually requires the operation of a book and a comparison based on the progress of the contract, which will require a variety of resources. After the smart contract loads the payment, the payment can be deducted after certain events are visible at some point.

Micropayments are another effective solution for smart contracts. Currently, microtransactions cannot provide exchange information that can be used to track changes in behavior, and when there is a problem, it is not possible to effectively track past changes.The introduction of smart contracts provides the best solution for these situations. By following the right data and setting reasonable payment terms, he can be aware of the warranty. recognizes microtransactions and collects evidence of inconsistencies.

Financial crime has been drastically reduced.Based on the use of blockchain technology, DC / EP shared all the benefits of tracking blockchain digital currency exchanges.Based on this, central banks can easily track the beneficiaries and payers of all digital assets, including transaction assets, money laundering and other crimes are illegal.

At the same time, determining that the digital currency itself can only be provided by banks and that there is no circulation certificate in circulation, the violation of DC / EP means is only copied or stolen by IT resources.With the bank's ability to track digital assets, it's nearly impossible to hide these patterns.

Therefore, with the use of DC / EP, financial harassment will be reduced due to lack of shelter.

History of the development of the internationalization of the yuan

The concept of internationalization of the yuan has three aspects. First of all, take advantage of RMB cash.some degree of rotation; Second, RMB financial instruments have become an international financial institution, including:Central bank investment vehicle; Third, international trade has been fixed in RMB.agreement to extendone percent. The second of these is the most important, and the Chinese government has given it a lot of capital.increase the size of the financial sector of the RMB.

The goal of further internationalization of the yuan includes five factors. First, the RMB can be used overseas.freely convertible into foreign currency;Second, in international tradefrom RMB to price listlieu,Although the two sides of the economy do not interfere with China, the third, the harmony of international trade isRMB is used as a means of payment.Fourth, the RMB isas a result of international investment and funding;Fifth, the RMB isinternational reserve currency,It is not only a tool for government intervention in foreign trade, but also for participation in specialized art.

june 2007, First of allA RMB contract won in Hong KongSince then, several large regional banks have jointly applied for two- or three-year RMB contracts in Hong Kong, for a total value of RMB 20 billion.

Year 2008July 10, The State Council approved the three principles of China's financial institutions,New exchange service, its activities include "the development of offshore RMB trade in accordance with international RMB standards".

December 4, 2008, China tooRussiaIn order to speed up trade between the two countriesChat to switch to local chat; 12 with the Financial Corporation of ChinaKauslimbank signatureA mutually beneficial exchange agreement, the two countries can provide short-term support of 180 billion yuan through the exchange of local currencies.

December 2, 20085ème place, The State Council decided to invest in products from Guangdong and Yangtze River Delta regions, Hong Kong and Macao regions, Guangxi and Yunnan and ASEAN regions.RMB payment driver; In addition, ChinaMongolia, Vietnam, Burma8 countries includedoptionalDuplex optionpledge of coins, the RMB localization process was faster.

February 8, 2009, China tooMalaysiasignContractThe figure is 80 billion yuan / 40 billion yuan.

Year 2009 39 months, Guo Chingping, vice-governor of the Central Bank, said the State Council approved the following:RMB cross-border payment terminal in Hong Kong. Special instructions and procedures are still under study and have not yet been issued.

mars 200911 days, the People's Bank of China as wellNational Bank of the Republic of Belarusdeclaration signA mutually beneficial exchange agreement, the aim is to promote bilateral trade and investment to promote the growth of trade between the two countries.

Year 2009 3the 23rd month, the People's Bank of China as wellIndonesian Bankdeclaration signA mutually beneficial exchange agreement, aims to promote two-way trade and direct investment to provide short-term investment to promote business growth and stable financial performance.

avril 20092nd month, the People's Bank of China as wellcentral bank of argentinaSign a currency swap agreement.

Posted in 6 categories in July 2009Measures to drive through the peace of the yuan industry, our yuan cross-border trade solution pilot program has been released.

june 2010, 6 Ministry of Foreign Affairs of the People's Republic of China (PRC)Demonstration zone extended for cross-border yuan peace from coast to coast to 20 provinces, territories and cities directly through the direct administration identify and expand foreign addresses to each country and region..

august 2011, People's Bank of China on August 23Trade in 11 provinces, including Hebei and Shaanxi, can accept RMB commitments for cross-border trade.Until now, the regional territory of the RMB trade union for cross-border trade extended to the whole country.

november 2012, South Africa, where the process of international yuan trade began; andSouth Africaexchange ofConvert Frent to RMB directly for payment.

October 2013On October 15, the 5th China-UK Trade and Financial Conference was held in Beijing.ChinaUK tooRMB italien and GBP Direct Trading.

January 2013February, Central Economic Work ConferenceIt is clear that the demand for RMB exchange rate variation in 2013In other words, it "gives up the security of the RMB exchange rate." It is necessary for the advancement of the RMB in the world economy, for the security of the world economy and for the development of the economy.

june 2014, the global RMB suppression network has been used frequently. June 18CCBLondon Renminbi Clearing Bank; 19The Bank of China follows the RMB clearing bank in Frankfurt.;

july 20144th hole, The People's Financial Company of China announced that it had decided to approve.The Seoul Metropolitan Corporation operates as a removable bank for RMB activities in Seoul., which became a milestone in establishing an RMB-free presence in Seoul.

2 mars 20169 manger, first in AsiaRMB Internationalization Research CenterThe incident took place in Beijing. The center was jointly established by the Financial Research and Training Institute of the People's Bank of China and the Namyang Business School of the Namyang University of Technology in Singapore.

According to an analysis of the current state of the RMB exchange, in the past, the RMB only circulated in the border area, but now it has been extended and exchanged in some areas of some developed countries.The process of economic development in China can be seen as the process of RMB expansion.The faster the market development, the wider and more important the product distribution..

The yuan has become the other "currency" in East Asia after the US dollar, the euro and the Japanese yen. Located on China's western border, the renminbi is known as the "little dollar" and was once a widely circulated hard currency. Travel to Vientiane, the capital of Laos. Xiaomengla, an important city for Myanmar cruise ships in China-Myanmar border trade and tourism, has an annual expansion and inflow of more than 1 billion yuan.

In Northeast Asia, the RMB typically crosses the border with Russia, North Korea, and Mongolia. In particular, Mongolia adopted the renminbi as a foreign advantage. Many Mongolian banks have started RMB savings programs. In border trade with Mongolia, RMB cash accounts for one-third of the total trade volume of the two countries.

The largest yuan cross-border tour is in Hong Kong, China. The RMB can be exchanged for free in Hong Kong in several ways. Unlike other neighboring countries and regions, the renminbi is used as a reserve fund in Hong Kong. The yuan was also widely used in Macau, China.

Competition from the internationalization of the yuan

Many obstacles still stand in the way of the internationalization of the yuan.. The main factors affecting the international trade of the yuan are the lack of growth in the international trade of the yuan, the depth and breadth of the domestic financial industry, the absence of international law, and the possibility that the external value of the yuan will fluctuate. important in the process. Internationalization affects the autonomy of the legal industry.

vegetable,The biggest problem will be the lack of international circulation of the yuan.. Indeed, in the golden age of the gold standard, Britain was able to export large pounds sterling to the world by exporting capital despite the current huge reserves. Cash in dollars in current funds is not enough.China canMondial economyOne of the largest countries that is easy to report, but still has a small amount of foreign direct investment.

How DC/EP Supports RMB Internationalization

DC / EP may reduce investment in assets outside of RMB.In the first phase of setting up an offshore payment facility, a significant investment is required to build an offshore payment infrastructure such as a clearing bank. At the same time, since the offshore payment centers are located abroad, the payments have to be controlled abroad, which makes the management difficult and poor for the state administration.

DC / EP is governed by digital wallets as only two parties to the exchange are required to use the RMB to complete the exchange and do not have to repeat the exchange from the exchange Offshore Clearing Bank.If you need to exchange money in foreign currency, you can pay directly to the People's Bank of China, which greatly improves the payment.

DC / EP promotes direct appreciation of the RMB in other countries.Currently, RMB cannot be paid directly in the currencies of many countries, and you must use third-party currencies such as US dollars as the payment method. This solution delays receipt and payment and requires payment of two additional currencies (i.e. foreign currency-USD, USD-RMB) to increase the exchange rate.

By using DC/EP, DC/EP can be used for direct contracts as long as both parties in the market recognize the value of RMB. If owner has DC/EPCorporationIf you want to use the local currency, you can apply to the Central Bank of China to remove the held digital assets and get the local benefits of the country where the business is located.This process effectively improves the overall economic performance of the industry. If the organization holding the DC/EP is a federal or local government, if there is a need to use local resources, the DC/EP can be used directly as a government agency to immediately announce additional benefits to achieve results . needs of this country. Country / Region.

Reduce conflicts in international trade. There are many causes of controversy and instability in the world economy, and they can be broadly divided into the following 5 situations.: Interpretation of contract law and international trade disputes, ambiguity agreements, the parties have differences in terms and circumstances, no consolidation, and there is only control of the parties due to the execution of the contract. does not agree that the contract can be terminated or extended, if the buyer does not grant the loan on time, if the buyer does not repay. delay, unreasonable refusal to accept the goods, malfunction of the vessel or contract of carriage, non-delivery on time by the seller, or non-delivery in good condition, quantity and volume are specified in the contract and do not provide documentation necessary . in the contract and the letter of credit.

In essence, the problem arises in the employment contract or the non-payment of compensation.

When DC / EP is introduced, the payment issues in the above dispute process will be resolved effectively.DC/EP supports smart contracts, and the buyer pays the seller at the start of the exchange, but the payment does not enter the seller's digital wallet once, but in payment according to the promotion of the contract. If a dispute arises over time, dispute resolution and resolution can also be agreed upon in a smart contract.

DC / EP can provide the necessary research and expertise on current RMB issues around the world, as long as it does not interfere with macro monetary policy or policy.

DC / EP is arguably the world's first practical test of CBDC and has a first-in, first-out advantage in time and application.By using the full application value of blockchain, this advantage can be fully utilized to support the development of the global RMB market.