According to a local outlet in , YAO Qian, general manager of Securities Depository and Clearing Corporation Limited (CSDC) as well as the former director of Digital Currency Research Institute (DCRI) under the PBoC, ’s central bank, issued a report titled “Central Bank Digital Currency: Optimization of the Monetary System and Its Distribution Design.(translated from Chinese)” The article discussed the drawbacks of the monetary system, pointing out that the central bank digital currency (CBDC) plays an important role in promoting the payment function of the existing legal tender. YAO mainly elaborated the topic from the two following aspects. On the one hand, the CBDC helps the public reduce the dependence on the payment services provided by the private sectors, which can also alleviate the regulatory burden and pressure of the country’s central bank. In addition to this, it also contributes to strengthening the authority of the existing legal currency, he added. On the other hand, the issuance of the CBDC is capable of solving the dilemma faced by modern monetary policy, including the inefficiency of policy transmission, the difficulty of counter-cyclical , the insufficiency of policy’s expectation management, and so on. On this basis, YAO also explores the issuance mechanism of the CBDC, indicating that the CBDC’s issuance should possess the economic state contingency. This feature is the key factor for the CBDC to solve the predicament that modern monetary policy is facing, according to YAO.
Published at Wed, 13 Mar 2019 03:12:54 +0000
