Forest: Global competition for digital advantages

On December 28, "The 1st Digital Finance Frontier Conference in 2021" was held online. The conference was organized by the Tsinghua SEM Digital Financial Assets Research Center and chaired by Professor Luo Mei, director of the center.Rudd Family Distinguished Professor at Cornell University's Johnson School of Business, Advisor to the Department of Finance and Director of the FinTech Center delivered a keynote address entitled "The Global Competition in Digital Currencies".This sentence is designed based on the content of the statement.

With the advancement of the internet and various technologies, digitalization has led to new business developments, where, for example, Uber and Airbnb employees can join or leave in real time and not long-term employees. Our demand for business and industry-specific models or cross-border interactions, data interactions and value-added interactions has further increased.In the digital sector, there should be an average to know the exchange rate , and these tokens will be created.

Tokens can be divided into 4 groups according to their trade position.

The first category is generic payment tokens which are an alternative to cash.For example Bitcoin, Ethereum and central bank digital currencies (CBDC), stability coins.

The second category is platform tokens.It is connected to a platform that offers both financial support and investment support, which facilitates its monitoring and evaluation.

The third group moves away from money objects and closer to a type of member.Whether for future services, equipment or memberships, such as NFTs.

The last category is cash flow, which is equivalent to cash flow tokenization on some contracts, and can use existing security measures.

This article explores the impact of central bank digital currency on national sovereignty and cryptocurrency, and how it will affect the country's competitiveness. Unlike traditional money, tokens have the advantage of being financially secure and adding smart contracts. Central bank digital currencies fall into the first category, payment tokens. Unlike Bitcoin, which fluctuates widely in value, digital returns issued by a mid-sized bank are robust and can leverage traditional methods of measuring rates, payouts, and storage. Additionally, digital banking firms have benefited from cross-border payments, making them more value-aware.

What drives mid-size banks in other countries to create digital advantages? If we look at the development of digital payments, we can see that the emergence of electronic payments such as Alipay, WeChat and PayPal, which have existed for 10 or 20 years, preceded it. Digitization and the Internet, currency or commerce have always created this competition.

Cryptocurrency digital currencies emerged after the 2008 financial crisis and have seen improvements in recent years. Decentralized cryptocurrency digital currency is difficult to control the finances of many countries, and money management is beneficial for monetary policy and national security. Overall, beneficiary countries have not experimented with CBDCs, with the United States and Europe, for example, still at the negotiation stage. Looking at some low-yielding countries, like Nigeria-based digital currency bank eNaira and El Salvador accepting Bitcoin as their national currency, it is worth studying this phenomenon.

The dynamic three-phase model has two countries, A and B. The currency of country A is stronger than the currency of country B. In addition to fiat advantages and digital banking advantages, we are also introducing digital crypto advantages. At the same time, we consider the simplicity of the results. The cost for the mid-sized bank to generate digital returns is high, but once launched, it can take its profits to the next level. However, this improvement in performance depends on the level of innovation and technology, which affects the use of technology and the development of CBDCs.

The first decision of this document is that whether cryptocurrencies or digital currencies are decided or not, national interests and national health are affected for integration. The benefits of monetary power are strong and have a positive impact.And when cryptocurrencies were introduced, they were seen as having a major impact on hard currency and undermining the global governance of these currencies, but potentially beneficial for the weak.

Why does this happen? One weakness is the direct impact, as cryptocurrencies compete with two currencies at the same time. It not only makes money stronger, but also makes the competition between money stronger and weaker, and the results of these fraudulent profits are sometimes even more, so crypto digital currencies can be beneficial for the non-cryptocurrency countries. Digital banking companies advertised in low-yielding countries have a greater impact on the benefits of digital crypto.We provide a shared decision approach for the development of central bank digital currency. Weaker but less powerful countries have the greatest incentives and desire to create digital bank accounts.

For the most profitable countries, there are two reasons to choose to set up a digital bank. One is to clear the bed of crypto digital currencies by central bank digital currencies in the early stages of development.Strong heals are sometimes not easy to use, so weak heals must be obtained or involved in a stable fund. If central banks put their own digital profits, the problem could be solved at least locally. With the rapid growth of cryptocurrencies, if not sooner, their scale will continue to increase, eventually forcing digital banking companies to manage crypto digital money and digital design profits in other countries. race.However, this does not change much even if the country is the weakest to develop a digital bank. However, it will eventually be affected by the best profits, so getting a stable profit or cryptocurrency is a simple rule. .

It is believed that the greater the competition between countries, the greater the potential for innovation, and innovation in technological and industrial standards will follow in the future.