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Digital currency era to bring huge changes

World Economic Forum (WEF) Updated: 2020-10-14

Countries all over the world are now conducting research on digital currency, with many experts expecting it to usher in a new era in the future. With the upcoming World Internet Conference exploring the 'digital currency era,' here's how many of the top players in this space see how people will spend money in the future, as well as the disruptive effects of digital currency and its obvious advantages.

According to Chai Hongfeng, academician of the Chinese Academy of Engineering, digital currency is essentially borderless, making it an ideal choice for cross-border payments and a better way to promote the development of inclusive finance.

Christine Lagarde, president of the European Central Bank, said that the "digital RMB" issued by the People's Bank of China, the country's central bank, can meet public policy goals, such as financial inclusion, security, and consumer protection, as well as meet the requirements for protecting payment privacy. Tobias Adrian, director of the IMF's Monetary and Capital Markets, noted that it was a great innovation and also the development direction of the future payment system.

Huang Yiping, vice president of the National School of Development (NSD) at Peking University and director of the Institute of Digital Finance of Peking University (IDF), noted that the central bank's digital currency may promote cross-border settlement and investment to become faster, safer, and lower-cost.

Pan Helin, exclusive dean of the Digital Economy Research Institute of Zhongnan University of Economics and Law, said that digital currency can not only effectively reduce the cost of currency issuance and circulation, but also improve the convenience and transparency of economic transaction activities. It can also significantly improve the efficiency and the accuracy of supervision.

On the other hand, digital currency may also face several challenges.

Thomas J Sargent, the 2011 winner of the Nobel Memorial Prize in Economic Sciences, said that we need more complete blockchain technology to ensure the safety of digital currency transfer.

Fan Yifei, vice-governor of the People's Bank of China (PBOC), said that a commercial bank with strong capital and technology should be carefully selected as the designated operating institution to ensure the security and stability of the digital currency system.

Ju Jiandong, a professor of Tsinghua University PBC School of Finance (PBCSF) and director of the Center for International Finance and Economics Research (CIFER), suggested that a new multi-level digital RMB payment and settlement system should be established. Wu Qianhong, vice president of the School of Cyberscience and Technology, Beihang University, indicated that digital currency replacing electronic payments will be a long-term process.

Chen Wen, director of the Institute of Chinese Financial Studies of Southwestern University of Finance and Economics, said that "digital RMB" will promote the reasonable implementation of supervision over illegal acts, such as fighting tax evasion.

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