The foundation of the digital economy is digital payment, and the core of digital payment is digital legal currency. The issuance and operation of digital legal currency will have a series of innovative impacts on the social and economic system, irreversibly reshape the face, structure and direction of our social and economic life, and thus make the entire social and economic system decisively enter the digital age.
Open the innovation of the monetary system
The issuance and operation of “digital legal currency” is a substitute for bank cash in circulation. In a nutshell, it is an alternative to MO. Specifically, the currency of the legal currency is unchanged, the accounting unit remains unchanged, and the equivalent exchange is maintained. Thus, it seems that the monetary system only has a new face and a new look, but is it a new species?
As we all know, the means of payment in circulation, for example, individuals, there are three main: bank cash, electronic money, and online digital payment tools or payment instructions such as Alipay and WeChat payment. Which part of the digital currency will “replace”? The answer is, they are all replaced! Because the three directly or indirectly constitute the cash in circulation, the so-called MO. It needs to be clear that this substitution is a market choice and not a legal mandate. Looking back, e-money is an innovation in bank cash, and online digital payment instruments or payment instructions are beyond the innovation of electronic money. Then, only digital legal currency is the innovation of the entire bank’s monetary system. In this sense, it is not just a new face, but a new life…
Digital legal currency, where is “new”? In summary, banks have three “difficult situations”: First, “full coverage” cannot be achieved on the service target: that is, there are always quite a few entities or transactions that cannot be reached by banking services. In this regard, the economic and social requirements for financial inclusion; second, the interest pressure is indeed “full coverage”: that is, a bank currency without a penny is interest-free. Either positive or negative (bank service fees, etc.), regardless of who pays, interest cost pressure is ubiquitous; third, the banking system has breakpoints or blind spots in time, does not support 24-hour seamless financial transactions . The banking system is not only a huge pool of funds, it carries the pressure of interest, but must also create money.
The “new” of digital legal currency lies in the innovative overcoming of three dilemmas: First, full coverage, and realization of inclusive finance. This is now very easy to understand, so I won’t go into details. The second is to eliminate the interest pressure in circulation, thereby improving the interest rate structure and improving currency regulation; why? Under the digital legal currency account system, there is only one certain “head of household” in each account. The funds in the account can only be used by the “head of households”, which is different from the bank account; thus, each digit of the legal currency is at any one time. There is only one “owner, either idle or used by the master. There will be no other people to use or pay interest; therefore, it is not a bank deposit account at all. If you do not participate in currency creation, it will not generate interest. The third is to achieve a seamless transaction in time. The digital legal currency is not a bank currency, and it is not necessary to comply with the banking counter business hours without restrictions, and it is not necessary to strictly follow the financial time or accounting procedures of the bank operations for account processing or financial arrangements. This breaks the bank’s time rhythm and eliminates breakpoints or blind spots in bank time.
There is another innovation in digital currency, which is simply unattainable in the banking system. That is, every second of every penny is recorded, that is, the digital currency is recorded in real time. The electronic record category of bank accounts is near real-time, but the time unit for the minimum billing is days, and there is an overnight problem.
All in all, there are four innovations in digital currency, namely full-time coverage, full-time trading, zero interest, and real-time bookkeeping.
The digital legal currency is the monetary innovation of the central bank, not the commercial innovation of commercial banks: the bank account can’t open the flower of the digital legal currency, and it can’t bear the corresponding fruit. Economist Keynes wrote in his famous book “Monetary Theory” that “modern currency is the account currency.” The central bank issued and operated digital legal currency through the establishment of a digital legal currency account system, which undoubtedly played a positive role in the central monetary policy. It has a positive effect on the reform of interest rate structure. This monetary innovation is both a challenge and an opportunity for commercial banks. Especially under the so-called “two-tier structure”, the mutual support and support of the central bank and the commercial banks will greatly promote the digital operation of the currency, not only greatly consolidate the “digital central bank” system, but also greatly contribute to the establishment of “digital commercial banks”. .
Open company financial digitization
Digital payments have been published in the private sector. Companies have always lacked digital payment tools, and NFC has made up for this huge shortcoming. However, it should be noted that NFC only solves the problem of “receiving (payment)”, and does not solve the problem of “out of the box”, which is a one-way line; and, it only happens between the individual and the company, in the company and Between companies, digital payments are “zero”. In China, after the scene of private digital payment is opened, the scene of public digital payment cannot be fully opened. Opening the public digital payment scenario requires not only the corresponding digital payment tools, but also the accounting basis for the digital payment of the public revenue and expenditure. The public payment activity is mapped to the company’s financial statements. In general, private payments do not require billing, so private digital payments are popular; public payments must be billed, which makes it impossible to simply copy private digital payments and provide legal and financial arrangements and support. At present, there are two kinds of workarounds: First, the company borrows private digital accounts, and the situation of off-balance-sheet payments occurs; the second is to use NFC to ease the pressure on digital collection. The fundamental method is to issue and operate digital legal currency, realize the company’s digital revenue and expenditure, and open the digital scene of digital payment.
The issuance and operation of digital legal currency, the establishment of “company (digital legal currency) wallet”, the company to open and use digital legal currency accounts. As a result, the same as the household sector, the corporate sector also has a bank account and a digital legal currency account. This innovation will expand the digital cash source and use of the corporate sector and open up the digitalization of corporate finance.
The company’s cash management has always been the most stringent financial constraint. The root cause lies in the fact that the degree of freedom of bank cash use is “too high” and the financial records are often “over” wide. Together, it is one, and the transparency is too low. Digital currency can achieve effective constraints, limited freedom, real-time complete records, and information is sufficient and transparent to facilitate the implementation of penetrating supervision. At that time, the company’s digital payment scenarios will emerge in an endless stream, and the demand for digital legal coins will also increase. This has created digital pressure on the financial activities of corporate organizations. That is, the difficulty and frequency of mapping corporate digital financial activities to paper financial statements has become a problem: on the one hand, financial statements often fail to reflect the company comprehensively or in a timely manner. Digital financial activities; on the other hand, corporate digital financial activities are increasingly difficult to adapt to existing financial compliance constraints.
This requires constant updating of relevant financial regulations, from temporary arrangements to long-term stable institutional norms, from borrowing to other norms to “tailoring” and self-limitation, from setting up digital accounting subjects to establishing digital financial processes. Develop a special digital financial activity report, and finally, issue digital report specifications and regulatory rules. The digitalization of corporate finance is a major challenge and a major opportunity for related industries. Without the issuance and operation of digital legal currency, the company’s financial digitization will lose its “fixed sea god”, and the digital economy will be biased or even out of balance.
Lead to the digitization of government finances
The digitization of financial revenues and expenditures of individuals or households and the corporate sector will inevitably affect and even determine the digitization of government revenue and expenditure. The key point of this series of changes or shocks is the issuance and operation of digital currency. The significance is to eliminate the “unbalance” in the digitization process of the three major economic sectors.
It is not difficult to find that private digital payment is the first product of regulatory tolerance. However, the digital gap formed between different economic sectors should not continue to widen or deepen. The digitization of government departments’ financial activities cannot rely on or borrow from private digital payment systems and must rely on the digital legal currency system. This means that the issuance and operation of digital legal currency will not only bring the financial digitization of the corporate sector, but also encourage the government departments to catch up and achieve financial digitization.
There are two main aspects of government fiscal digitization: First, the fiscal revenue and expenditure will be digitized. This will open up the digital scene of large-scale and large-scale economic activities on a large scale and promote the digital development of various undertakings. Medical and pharmaceutical, education and training, social security, pension insurance, housing subsidies, and quasi-utility revenues and expenditures, etc., a series of major areas related to the national economy and people’s livelihood, and even taxes and civil servants’ wages, will be due to the issuance and operation of digital legal currency. And achieve digitalization. As a result, the expansion and deepening of a series of public scenes is irreplaceable or impossible for any enterprise department. For example, the digitization of public medical expenses will directly affect medical, pharmaceutical and other related industries. The existing operating model will also undergo fundamental changes. The interest chain will be difficult to sustain, and the medical and pharmaceutical industry will also be reformed. This will take you into the digital fast lane. In addition, the real-time full coverage of medical, medical digital settlement and digital payment systems, its efficiency, transparency and fairness will meet the interests of doctors and patients in various aspects; let go, this system will greatly reduce the total The cost of social medical expenditures reduces the budgetary pressures and expenditure pressures of government departments. At the same time, it also provides a broader capital cycle infrastructure for the long-term development of medical and pharmaceutical industries. It can be imagined that the digitization of government departments will be steadily advanced due to the issuance and operation of digital legal currency, and relevant undertakings will also make great progress.
Second, fiscal digitization will also optimize the fiscal revenue and expenditure structure through the issuance of digital debt, promote the overall improvement of the quality of macroeconomic operations, and guarantee social justice. The issuance and operation of digital legal coins can help promote direct financial exchanges between government departments and individuals or households: on the one hand, the digital filing and payment of individual tax revenues will become more realistic and reasonable, and efficiency and transparency will be guaranteed. On the other hand, the government department will also directly establish debt relations with individual citizens through the digital legal currency account system, that is, issue digital debts, not only reduce the intermediate agency fees, but also significantly reduce the cost of issuing bonds, and can realize differential interest rate marketing and utilization. Big data sells public debt more precisely. Enhancing and even expanding the proportion of government departments’ digital debt, level and structure, can greatly optimize the scale, structure and level of local debt, improve the transfer payment system, and play a positive role in the interest rate level and the quality of debt operation of the entire financial system. .
In a certain sense, the scale and level of digital revenue and expenditure of individuals or households are the basis and vane of the digital economic system; the ability and level of digital revenue and expenditure of the corporate sector is the fundamental driving force for the expansion and promotion of the digital economic system; The effectiveness and vitality of the department’s fiscal digitization is the guarantee for the digitization of the entire fiscal and monetary financial system. The fundamental criterion for testing the success or failure of the issuance and operation of digital currency is whether it can effectively lead to the rise and transformation of financial digitization.
Realize the digital transformation of asset structure
The issuance and operation of digital legal currency will directly generate digital assets, thus changing the structure of social assets.
In the social economic system, there are roughly two current asset structures: physical assets and equity assets. Physical assets mainly refer to those assets that are low-value consumables or accounting depreciation. They often have clear and stable physical attributes. Equity assets, which do not have physical attributes, are completely dependent on legally defined and guaranteed assets. . In reality, asset patterns and their conditions are often much more complicated. For example, real estate properties are physical assets that need to be depreciated. On the other hand, they are also equity assets. This mainly refers to related warrants or ownership registration. In part, no depreciation is required, and the book value can be adjusted with the market.
Currently, there are three main types of digital assets: (1) digital music products; (2) digital image products; and (3) digital currencies. The first two are digital forms from the beginning, which occur and operate under digital conditions; the latter – the digital currency – also known as “encrypted assets”. The first two generally have basic legal guarantees; the legal definition of cryptographic assets and their financial norms are still being explored, formed and improved.
In the socio-economic asset structure, the addition of a class of assets generally meets two requirements: legal recognition; financial valuation. It is not difficult to find that the current predicament of encrypted assets is not in the law, but in financial arrangements. From an international perspective, the relevant legal disputes are in the financial pricing and arrangement. What needs to be added is that some statements about “data as assets” are very imprecise and do not help legal or financial practice, but increase the annoyance. Realistically, a lot of data is actually data garbage. It is not surprising that high technology also produces garbage, such as space junk; in digital technology and the digital economy, the formation of a large amount of digital garbage is the norm and will cause economic and social vigilance and reflection. Under commercial conditions, a large amount of data operations, mining, and development, including recycling, are actually carried out through service agreements, which are guaranteed by contract law, that is, not commercial operations in the form of assets. This point needs to be clear and emphasized.
After the issuance and operation of the digital legal currency, the figures in the digital legal currency account are monetary assets, but not the traditional monetary assets – the bank monetary assets (the assets in the sense of banking law). As a monetary asset, the digital legal currency can be compared with the assets in the sense of the banking law, and has the corresponding equity asset attribute, but at the same time it also has a digital attribute, which is a kind of digital asset. With the new problems and new situations that are constantly emerging in the operation of digital currency, it will break through the analogy of equity assets under the banking law, and thus highlight its digital traits. When digital finance and even digital finance run to a higher stage and the status is stable, the relevant digital legislative system will be established and improved, and digital currency assets will be supported by both financial and legal levels.
Once the digital legal currency is independently a digital asset, the various digital financial assets or financial assets built on it will be followed up as digital assets; more types of digital assets will emerge, be denominated in digital currency, and legally guaranteed. Among them, various types of digital assets developed and operated by technology such as blockchain are denominated in digital legal currency, and their operation will greatly expand the demand for digital legal currency. Subsequent legal and financial issues or challenges associated with this will demonstrate the vitality and vitality of digital assets.
In the long history of social economy, assets were originally confined to physical attributes and ultimately guaranteed by civil law. In modern times, capitalism has triumphed and the so-called “legal revolution” has emerged. Commercial law has broken through the constraints of civil law: the rise of commercial law such as companies, bills, maritime, securities, banking, insurance, etc. has greatly expanded the equity assets and made them At the scale level, physical assets in the sense of civil law are exceeded. It is not difficult to find that assets in the sense of commercial law are so-called book assets, often the numbers on the statements. Digital technology has induced the digital economy and has become a digital asset. It has brought about the financial and legal challenges: it is difficult to measure and accept digital assets based on the position or perspective of the bank currency. It is precisely the issue and operation of digital currency. This opens the door to convenience and will introduce more complex and diverse digital assets. Just as the banking system created by equity assets through money has greatly exceeded the physical assets in scale and level, the future digital assets will also pass digital legal currency, and the scale and level will greatly exceed the equity assets. It is also in this sense that the digital legal currency has opened the revolution in asset digitization and will surely prosper and strengthen the digital economy.
Personal choice of freedom and great changes in economic concepts
An era has a monetary economic concept of an era, and the economic society also presents a corresponding decision-making and selection model.
Modern social and economic changes are the era of great development of enterprises, especially production enterprises. In line with this, the rise of the banking system has supported the creation of the entire industrial economic revolution. In this era, the protagonist of the economy and society is the enterprise. The choice and freedom of enterprises is the main theme of social and economic operations, guiding and shaping the concept of the entire social and economic system.
The era of digital economy is the rise of personal choice and the basic force of social economic operation; individual freedom will become the main purpose and foundation of social economic concept, guiding and shaping the whole social and economic concept with more human connotation, corporate rationality and freedom and its symptoms will Get the maximum correction and discard. This round of currency reform, with the turning point of digital legal currency issue and operation, will support the digital economic revolution, and more importantly, provide a “full-time coverage, full-time transaction, real-time accounting, zero interest” for the digital economy. The monetary base, thereby reducing the transaction costs of the whole society, the opportunity cost of all employees, and bringing about universal economic freedom.
The socio-economic impact of the issuance and operation of digital legal currency will affect and touch all sectors of the social and economic system, and will not only rewrite the existing network platform economy, but also bring immeasurable to the international economic system. Impact, its innovative significance will continue to expand and deepen.