Zhou Xiaochuan: developing electronic payment currency requires the same while reserving differences

 Zhou Xiaochuan: developing electronic payment currency requires the same while reserving differences

November 23-24, 2020 China Singapore (Chongqing) strategic connectivity demonstration project financial summit officially opened. The summit was jointly organized by the Ministry of Commerce of China, the peoples Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the new Ministry of trade and industry of the State Council of the peoples Congress of the peoples Republic of Singapore and the Chongqing Municipal Peoples Government. Li Bo, vice mayor of Chongqing municipal government, said at the opening ceremony: this year marks the 30th anniversary of the establishment of diplomatic relations between China and Singapore, the 10th anniversary of the construction of China ASEAN Free Trade Area, and the 5th anniversary of the implementation of the Sino Singapore Chongqing strategic interconnection demonstration project. In the past five years, China Singapore financial cooperation, key innovation projects have been promoted, cross-border accommodation services have been more convenient, and exchanges and cooperation have been normalized.

Zhou Xiaochuan, President of the peoples Bank of China, vice president of Boao Forum for Asia and chief representative of China, emphatically discussed the development of digital currency trade and electronic payment between countries in his speech at the opening meeting. Zhou Xiaochuan said that under the influence of the epidemic situation, digital economy has been attached great importance to and developed. Online teaching and home office are popular. The use of cash in retail payment is also decreasing. This has formed a good opportunity to vigorously develop digital currency and electronic payment. Financial cooperation between China and Singapore has always been positive, smooth and fruitful, and has maintained close communication and interconnection in the field of payment.

Retail payment is the basic link of digital currency and electronic payment

The cooperation between China and Singapore in digital currency and electronic payment should first focus on retail payment systems. The adoption of new technology in retail payment system can improve efficiency, and it is safe and effective. When countries around the world discuss digital currency, their emphasis is different. Some people focus on international trade payment, some focus on financial market settlement and payment, and some focus on cross-border remittance. Zhou Xiaochuan stressed that in my opinion, we should pay attention to retail payment, including payment at home and cross-border payment such as travel and shopping abroad, that is, current account payment.

Zhou Xiaochuan said that in terms of international trade, financial market and remittance, there will also be a need for upgrading with the development of technology, but it is not as urgent as the current upgrading demand of retail system. Retail system is the most basic cooperation point for cross-border transactions. He stressed that if cross-border remittance is very convenient, but after landing, the user cant use the currency in his hand to make retail payment directly. Instead, he needs to exchange the currency of the tourist destination, and also involves requirements such as exchange rate, foreign exchange management and anti money laundering, so the convenience can not be really improved.

Zhou Xiaochuan mentioned for example that Facebooks Libra started with cross-border payment. In order to solve the problems of foreign exchange policies and anti money laundering policies in different countries, as well as the inconvenience of retail payment due to currency and exchange rate issues, Libra initially tried to pay in a package, but faced many problems that were difficult to break through. In fact, some of the obstacles to cross-border remittance and cross-border trade are not in terms of technology, but rather depend on policy coordination to provide convenience.

For the development of e-money payment, Zhou Xiaochuan creatively mentioned that the development of e-money payment also requires the same while reserving differences. He pointed out that the development of e-money payment should not only see the development conditions of the country or between the two countries, but also focus on the whole ASEAN region and even East Asia. Many countries worry about whether the process of digital payment will affect the currency sovereignty of each country, dollarization or RMB. The concerns of various countries are understandable. After all, the macroeconomic conditions and debt levels of different countries are different. Therefore, it is necessary to avoid imposing a certain currency at the initial stage, but to respect the different situations of each country.

Similarities and differences in the development of e-money between big countries and small countries

In the long run, it is difficult to say whether there will be a world-wide electronic currency in the future. Zhou Xiaochuan stressed that the convenience and efficiency of interconnection can be enhanced on the basis of digital electronic payment of various countries based on exchange, and support the currency ownership of each country at the same time. At present, from the global situation, in the process of electronic payment digitization, there are similarities and differences between big and small countries in the challenges and problems to be solved. For the country, if it is not the best time for the country to change the technology, it will not be the best time to change the technology. However, for large countries such as China, which has a population of 1.4 billion, if the scheme needs to be adjusted, it will require high time cost and risk. He suggested, in particular, that smaller countries should boldly try to provide the world with the results of their experiments and promotion.

Zhou Xiaochuan continued to point out that for big countries, it is possible to accommodate experiments of various schemes, just like Chinas development of free trade zones. There are 21 free trade zones, among which the focus of free trade policies adopted is different. From different experimental results to find good experience, through the competition of the best trade area, and finally to the national demonstration and promotion. Singapore has the conditions to launch the scheme and carry out experiments relatively quickly, which also provides us with experience.

China has a number of pilot programs that have been preliminarily demonstrated to be feasible. Not long ago, the bank for International Settlements and the group of seven countries published a report on the central banks digital currency CBDC, which initially summarized the progress of various attempts made in the previous period and made some useful conclusions.

Zhou Xiaochuan concluded that the cooperation between China and Singapore in digital currency and electronic payment is to be expanded on the basis of China ASEAN, East Asia and the future. In the case of differences in policy management and law, it is possible to put forward a more adaptable scheme, which can give full play to the enthusiasm of various countries. I believe that the development and pilot of digital currency and electronic payment can also play a good role in human public health and response to the epidemic situation.

This year marks the 30th anniversary of the establishment of diplomatic relations between China and Singapore, as well as the 5th anniversary of the implementation of China Singapore interconnection project. China and Singapore one belt, one road one belt, one road, and the other important starting point for Zhou Xiaochuan. In recent years, the relationship between China and Chongqing has been developing steadily. Singapore is the first country to support the one belt and one way. Chongqing is a major town in Southwest China and an important node in the construction of one belt and one road. In the vision of Chongqing, we must strictly implement the high starting point and high level innovative directive requirements of the Sino Singapore strategic interconnection demonstration project emphasized by general secretary. In order to deepen the financial cooperation under the interconnection and digital cooperation in payment system, Chongqing will surely be able to make good use of its unique geographical advantages to form a new pattern of face-to-face financial opening and cooperation between the West and ASEAN.