How is the underlying architecture of digital RMB designed and what is the design intention?

category:Finance
 How is the underlying architecture of digital RMB designed and what is the design intention?


According to Yao Qian, former director of the digital currency Research Institute of the Central Bank of China, the core elements of the digital currency system framework of the central bank are one currency, two Treasuries, three centers.

Design architecture of one currency, two libraries, three centers provided by AUC cloud Chain Research Institute

Digital currency refers to digital currency.

Two banks refer to the digital currency issuing bank and digital currency bank. The digital currency issuance database is the database that the peoples Bank of China stores the central banks digital currency issuance funds on the central banks digital currency private cloud. Digital currency commercial bank library is the database for commercial banks to store the central banks digital currency, which can be locally or on the central banks digital currency private cloud.

According to Li Lianxuan, chief researcher of AUC cloud Chain Research Institute, the process among the six is: according to the total amount of digital currency issued, the central bank uniformly generates digital currency (i.e., produces digital currency fund) and stores it in the central banks issuance library; according to the demand application of commercial banks for digital currency, the central bank sends the digital currency to the corresponding commercial banks database for storing digital currency, namely digital currency The currency is from the issuing bank to the bank; when the user applies to withdraw the digital currency, the digital currency enters the storage medium of the users client (such as in the mobile phone) from the bank library to the circulation link; in the circulation phase, the digital currency is actually transferred between the two users respective digital wallets to complete the payment, and the payment is divided into online transactions Offline trading and trading.

Operation end: double layer operation system

In the operation of the central banks digital currency, the central bank adopts a two-tier operation system of central bank commercial banks / other operating agencies.

Double layer operation system of central bank commercial bank / other operating institutions

Fan Yifei, vice president of the peoples Bank of China, wrote an article pointing out that the dual mode of central bank commercial bank is generally adopted in cash issuance in various countries. The central bank is the supplier of basic money and the regulator of currency circulation. Commercial banks provide cash deposit and withdrawal services for the public through money input, circulation and withdrawal. The main central banks of the United States, Britain, Germany and China transfer cash to commercial banks for exchange with the public. This will not easily lead to financial disintermediation, nor will it have a big impact on the operation of the existing financial system and the real economy.

Fan Yifei said: first, make full use of existing resources and technical reserves. As a designated operating agency, commercial banks should have mature infrastructure, perfect service system and sufficient talent reserve. The exchange service provided by commercial banks can fully mobilize market forces and realize the survival of the fittest. Second, reduce the risks. As a designated operating agency, commercial banks have rich experience in retail business governance system and risk control measures, which can effectively prevent operational risks and enhance public confidence in holding and using digital RMB. Third, financial disintermediation should be avoided. Digital RMB follows the dual mode of currency issuance system, and does not pay interest, to avoid competition with commercial bank deposit currency. Fourth, it is conducive to the transmission of monetary policy. The digital RMB exchange provided by commercial banks can accelerate the speed and efficiency of capital return to commercial banks, promote their financial intermediary role, and provide more direct and efficient channels for monetary policy transmission.

The two-tier system can avoid the central bank directly facing the C-end, and also avoid the consequences of financial disintermediation for commercial banks. It avoids the impact of the digital currency system on the current financial system, and also allows financial institutions to actively participate in the pilot project of digital currency. Suning Financial Research Institute researcher Sun Yang said.

Li Lianxuan also mentioned that the central banks digital currency has a certain competitive advantage over bank deposits. If the single-layer operation system is adopted, it will directly lead to the loss of bank deposits and the phenomenon of financial disintermediation.

He also believes that if a single-layer operation system is adopted, the central bank will directly face all users, which will return to the era of unified central bank in the planned economy. Moreover, commercial banks and other payment institutions tend to be mature in IT infrastructure application and service system. The two-tier operation structure is conducive to give full play to the talent and technical advantages of commercial institutions.

The purpose of 100% reserve payment is to prevent commercial banks from over Issuing digital currency

In the two-tier operation system, 100% of the reserve is required to be paid in full without interest.

Hao Yi, a researcher at the Bank of China Research Institute, said that Chinas goal of issuing digital currency is to replace cash M0. At present, when commercial banks exchange cash, commercial banks need to pay 100% reserve. The purpose of paying 100% reserve for digital RMB is to prevent commercial banks from over Issuing digital currency; it is also to enhance public trust in digital currency and reflect the national credit behind digital currency.

In his opinion, no interest payment represents digital RMB, which is only regarded as the digital form of cash, which also shows that digital RMB is non-profit and pursues the maximization of social benefits and social welfare. The impact on the existing monetary system, especially the transmission of monetary policy, will not squeeze out commercial bank deposits, nor will it become a monetary policy control tool. Digital RMB does not pay interest, but its legal currency characteristics will break trade barriers and speed up currency circulation. Theoretically, it will have a positive impact on inflation.

The digital RMB is positioned in cash, and it is located in the cash in the wallet. Of course, it does not bear interest. In addition, the accurate positioning is M0, which can be used to pay for consumption at any time. The goal of developing digital currency that does not pay interest is to spend money to promote consumption, promote consumption and stimulate the economy, so this is a positive role in promoting it. Sun Yang said.

Payment end: Double offline, loose coupling

Li Lianxuan believes that in the user terminal, the digital currency of the central bank mainly shows three characteristics:

The second is the dual offline payment function. The three party payment tools such as Internet banking and Alipay need to connect to the transaction, otherwise they can not be traded. The dual offline payment function of the central bank digital currency will enable the transaction to complete the transfer transaction if two mobile phone exchanges are exchanged even if the two parties are offline.

Finally, it mainly focuses on small retail scenarios with limited amount and time. It is helpful to solve the double flower problem, but also out of the consideration of protecting commercial banks and preventing financial disintermediation.

Sun Yang said that the digital currency of the central bank is based on the generalized account system, that is, the digital currency of the central bank can be separated from the traditional bank account to realize value transfer, which greatly reduces the dependence of the transaction link on the account. It is a loosely coupled account system. Therefore, for users and enterprises, if they only use the central banks digital currency for micro payment, they dont need to go to commercial banks or commercial institutions to open an account. As long as they download a central bank digital wallet app and complete registration, they can use the central banks digital currency for transfer. In addition to taking out the central banks digital currency from the digital wallet or recharging it into the digital wallet, there is no need to bind an account for the mutual transfer between users and users. Digital currency wallets are not bank accounts.

The advantage of loose coupling is that it has high availability and is conducive to Inclusive Finance, which is of great significance to remote rural areas and mountainous areas. As long as you have a legal certificate account that can mark your identity, you can use it as an account carrying digital currency wallet, he said

Hao Yi believes that the advantage is to achieve controllable anonymity, which can not only meet the anonymous needs of some users, but also control risks to the greatest extent. Anonymous demand can meet the needs of overseas consumers for privacy protection, and help promote the overseas promotion of digital RMB. It is helpful to reduce the possibility and risk of money laundering for anonymous accounts by adopting quota management. The disadvantage is that there is still money laundering risk. Even if the limit management is adopted for anonymous accounts, in the digital era, there are still technologies to control a large number of anonymous accounts for small transactions, so as to achieve the purpose of money laundering. Hao Yi said. Sun Yang also believes that loose coupling puts forward requirements for security and risk control. Other account systems, such as social security, drivers license, ID card, student ID card, etc., may not have the online risk control capability of financial institutions, which requires the central banks digital currency system to deploy more technologies in KYC and risk control to ensure security. Source: surging news editor: Zhang Mei_ NF2100

Hao Yi believes that the advantage is to achieve controllable anonymity, which can not only meet the anonymous needs of some users, but also control risks to the greatest extent. Anonymous demand can meet the needs of overseas consumers for privacy protection, and help promote the overseas promotion of digital RMB. It is helpful to reduce the possibility and risk of money laundering for anonymous accounts by adopting quota management.

Sun Yang also believes that loose coupling puts forward requirements for security and risk control. Other account systems, such as social security, drivers license, ID card, student ID card, etc., may not have the online risk control capability of financial institutions, which requires the central banks digital currency system to deploy more technologies in KYC and risk control to ensure security.