Zhou Xiaochuan said that when he was at the central bank, a colleague also suggested that when a commercial bank issued digital currency, it seemed to be an envelope. The banknotes inside were still banknotes of the central bank. Different banks may have different envelopes designed, such as anti-counterfeiting and other aspects. It’s different, but in essence, the envelope is filled with central bank currency.
This analogy is very interesting, but he thinks it is not exactly the case: the envelope can be central bank currency, it can also be the central bank’s certificate of payment, or it can be the central bank’s comfort letter, with different degrees of assurance. If the degree of assurance is lower, the bank may be required to strictly monitor the capital adequacy rate and liquidity, and the possibility of problems is relatively small. This envelope can also put things designed by the agency itself, the general requirement is to maintain stability and effectiveness.
In short, the first responsible person in the two-tier system is still the second-tier institution. If a bank has a run or withdrawal problem, the responsibility of the central bank will vary according to different design schemes.
According to the flow chart of the concept of digital currency, Bitcoin appeared in some early international organizations or the mainstream definition of the West. The central bank discussed that this is an unstable currency. The central bank wants to develop a stable currency, so it proposed a stable currency. concept. Later, there was Libra, a private cryptocurrency, and everyone proposed that private currency should not be used, because there may be unexpected problems. It will become a central bank digital currency, so it is CBDC. Others pointed out that CBDC may be disintermediated, and it may not be easy to imagine in advance, so they began to accept the two-tier system of CBDC.
China started relatively early, the above concepts have been studied in advance, and there are preliminary opinions. When many people are obsessed with blockchain technology, the Central Bank of China has realized that things are not so simple, so in 2017, ICOs and domestic transactions of Bitcoin were banned. At the same time, the banking system does not support Bitcoin to provide services for retail payments. When everyone imagines that the relationship between the central bank and the second-tier institutions is a wholesale and retail relationship, the People’s Bank has also begun to consider a structure that goes beyond the wholesale and retail relationship.
Data privacy protection in DC/EP, as well as blockchain and distributed accounting technology
Zhou Xiaochuan also introduced the issue of data privacy protection and controllable anonymity. He said that transactions must be anonymous, but not 100%. Authoritative institutions, especially anti-money laundering institutions, must be able to grasp these data while protecting customer privacy to the utmost extent. The transaction data reported to the central bank should be mainly used for anti-money laundering, anti-terrorist financing, combating telecommunication fraud and correcting operational errors.
He himself has always advocated that it is necessary to fully study and absorb some rules of the European General Data Protection Regulation (GDPR).
When big data exchanges were popular before, in fact, a lot of personal private data was leaked, and many customers did not know that their data had been leaked or even bought and sold. If all the leaked information must be erased, the ones that should be erased must be erased. For some users, the passwords should be changed, and the accounts should be changed when the accounts are changed. This is very complicated and time-consuming, and it is not necessarily effective.
In this case, security still needs some means, such as:
1. Use an encryption mechanism to upload transaction data to the central bank. The central bank backs up and tracks the data for the above regulatory purposes, while ensuring the security of data privacy.
2. Similar to credit card refunds according to corresponding regulations and procedures, operational errors must be considered and corrected.
3. The payment operator cannot copy, transfer (excluding the data transmitted to the central bank for backup) and sell the data. If the user requests it, the relevant data must be deleted.
4. Consumers manage account limits for different purposes to ensure safety. Of course, this approach appears to some people to be complicated and inconvenient, but it is based on the judgment that a large amount of private data has already flowed into the market.
Regarding blockchain and distributed accounting technology DLT, as one of the technical directions of DC/EP, research and development are also being stepped up. Related technologies are also applied in non-payment fields in the financial system, and some have made good progress.
In the payment field, due to throughput issues, it currently cannot play a core role in the retail payment system, but the future development of technology can be expected. In addition, there are occasional errors in the payment field that need to be corrected, including credit cards. If they are wrong, they must be changed. Not only do a negative transaction and flush out the original transaction, but the original transaction record must be changed or erased. Otherwise, the information may be misused, including entering the credit information system. At present, blockchain emphasizes that it cannot be tampered with, which is in contradiction with this reality.
In short, blockchain technology has to wait for further development.