Digital currency: Star Sea or Ultimate hegemony

Shao Yu
The privately issued digital currency for private issues represented by Libra is a non -commodity and non -sovereign super currency form. If data is the largest asset in the future, digital currency must be the ultimate currency form in the future. Digital currencies will eventually become the value of new economy and new (data) assets generated by the new round of technological revolution, payment methods, wealth reserves and world currencies.
If it develops arbitrarily, its development trend may be to kill the small country currency first, then the small digital currency, and then kill the (cross -border banking side) payment system, and then kill the hegemony currency. For the final dragon.
What is the theoretical foundation of digital currency
I we are familiar with the various currency forms before the birth of digital currencies, either commodity currency, such as gold, silver, or credit currency, such as legal currency (banknote). Essence If the new digital currency is only Bitcoin, its total amount is limited and the impact can be controlled. But if Libra or central bank's sovereign currency is issued on a large scale, the story is very different.
This currency is a truly brand -based product of trust and consensus based on algorithms, or a tangible traditional accumulation, but it is a digital upgrade, which is a completely different path. The mainstream of the future currency must be digital currency, but it is not sure whether it is the central bank's sovereign extension, or the business like libra, or all open source or all of the central, more like the initial private currency.
The blockchain is also the history of ten years. There are many problems with virtual currency represented by Bitcoin. Its limitations are similar to gold and silver, and gold and silver are also non -sovereignty. Libra is similar to it, but their derivative system is different. Libra is a compromise and compromise. It must obtain the consent of the existing interest subject to develop higher levels, but one day it will be separated from its mother, and the probability of digital currency is the development trend.
E every currency must have theoretical foundation to support the evolution of the entire financial logic. For example, in the gold and silver era, the logic is very simple. A simple theory of currency quantity, coupled with the so -called gold transportation point, we can get the exchange rate and the interest rate. But the problem is that the world is completely different from credit currency or sovereign currency. The impact of this mutation is too great, and human beings have no way to control it now, or completely lose control (how the corresponding micro pricing theory should evolve is a huge challenge).
The credit currency is a dual structure. Theoretically high -energy currency is controlled by the central bank, but the broad currency is based on animal spirit. How to create it? M2 is actually endogenous. Once the crisis occurs, the central bank will definitely come forward, because at that time, the animal spirit of the entire market was frightened. You can only take the Kanes road. In fact, this is still the case. Most monetary policies control the total credit (leverage).
Under the theory of modern currency, debt and currency homologous, go down. In the case of sovereign credit currency around the world, what do we see more? It is a currency hallucination, the bubble of assets, and eventually entered the Ponzi scam, either inflation (insufficient production capacity), bubbles (repeatedly), and even national bankruptcy (unless they do not fall). It's just that this Ponzi may be led by the sovereign economy.
The status of the current debt accumulation, and the method of saving the crisis in the past ten years, it is ridiculous. Currency, everyone knows that the entire economy is going to enter a new round of recession. What is the only action everyone do? Just continue to put water. What is crazy? That is, you are constantly doing one thing, but you expect different results that the world is working hard in this direction.
The theory has also made a new catering, becoming a slave to power, invented the so -called modern currency theory (MMT). With MMT, the final bottom line is gone. As long as there is no inflation, there is no limit to printing money. It is because we are now the basis of the entire credit theory. Debt and currency are homologous, and credit creates debts. Therefore, the result it produces is either inflation. This is the situation that Germany encountered in 1923 because of insufficient production capacity.
It is the destruction of bubbles, or the bankruptcy of the country. Of course, this is constantly appearing. Unless you are global currency, that is, the sovereign currency of global reserves is like the US dollar. Everyone knows the current debt in the United States. Woolen cloth? Because there is no choice, you can't choose cosmic coins. The United States is the largest last global "lender".
classic fallacy
We problems now, frankly, are based on a very wrong famous constant formula. In the credit economy, the broad currency M2 = GDP CPI asset CPI. This is a classic fallacy error Essence
is very simple. We feel that most M2 should be our GDP CPI, that is, the nominal output digestion, and the rest of the part has entered the field of asset bubbles. The color line represents the ability to create wealth (nominal GDP), and the red line represents M2, which is the ability to create currency.
M2 and nominal GDP growth rate, people roughly believe that it may enter the field of bubble, but it is not. Because of this, only 5%of the currency supply will enter the foam field every year. Some evidence shows that 10%in M2 is the creation of GDP, 10%enters CPI, and 80%of the asset prices are actually a major fallacy.
It can be imagined that when the nominal GDP of the previous quarter increased by 8.5%, and M2 became 8%, a variety of financial chaos will appear, including running defaults and shrinking asset prices. The reason for running is not because the central bank also issues digital currencies, but because of rapid liquidity tightening. You see that the first response is the reaction and foaming of the financial market. Of course, the real economy is connected with harm.
So we are trapped in such a wrong credit economy model or formula, and more importantly, we may live in a huge currency hallucination, and these currency hallucinations come from the speed of credit system or their own expansion. In the past 40 years, the economy has expanded 240 times, a great miracle. Everyone uses it. We have created more than 200 times the wealth of these materials, and at the same time, the currency is more than 1,000 times. This is the dilemma brought by the classic credit currency. The same is true of developed economies.
Why the so -called currency neutral theory is wrong at the beginning. It is absolutely impossible to be neutral. In the short term, it is not neutral in the long run. At that time, talking about currency neutrality was appropriate, but how could currency be only a medium of trading? If the currency is not neutral, what is the foundation of macroeconomics? It is gone, and there is no fair rule to judge who can get the greatest wealth, which will definitely cause differentiation, but will the elite of technology or new technology bring a better world? Be careful when answering this. If the currency authorities of various countries are not reliable, will Internet giants like Facebook be more reliable?
? Is libra reliable
Libra will be more reliable. What is the theory based? Based on SDR, the so -called ESDR, do you need distributed technology? It will use it, it emphasizes that it will be handed in after five years. Now it is actually based on its own network and its own users. But the compromise with reality is to get real assets as mortgage 1: 1.
The personal understanding, it is defining the language of MOVE, and continuously moves some asset packages, but this movement may bring advantages on the algorithm, that is, it is difficult to have many loopholes, such as out of thin air, such as out of thin air. Disappearing or attacked, of course, this depends on how beautiful the computer language written by the 26 -year -old programmer is. Now it may not seem to see better than the existing blockchain technology.
but the ESDR -based ESDR issued by 100 companies is more reliable than the SDR issued by several major powers? Everyone knows that SDR is basically finished. Except for a small part of the top countries, it is useless to find it. Because at the crisis, everyone simply abandoned SDR, and the exchange of powerful currencies was over. The US dollar was exchanged and the yuan was doing.
If libra is successful, this is a watershed, it will create an ultimate corporate empire. What it does is to remove the political centralization of sovereignty, but it strengthens the business center and it will become the optimal currency zone of LIBRA (similar to similar EUR). We believe that at the beginning, it must carefully obey the supervision arrangements, but the replication of 1: 1 is just the beginning. Create the coming of the currency morning and evening, and the good private central bank will try to obtain the coinage tax.
The idealism will allow the interests of reality. If it develops arbitrarily, its future trend must be to kill the small country currency first, then the small digital currency, and then kill the (cross -border banking side) payment system, eventually kill the hegemony currency, and become a private central bank in the world.
but it is unstable. Unstable is not only from the instability of its architecture, that is, which types of baskets it uses to form SDR. More importantly, if Facebook is posted, it is estimated that Google will also be posted. Tencent and Ali will also send it. And it is estimated that the authorities will also support them, so that a variety of currency areas will continue to compete in the network space, just like seeing thousands of blockchain currencies are constantly competing. How big, how wide the underlying application scenarios, and who the last lender is.
The exchange rate fluctuations brought by changes in the differences between the strength differences between different economies, even the same digital currency basic technologies. This scene seems to be similar to Hayek's description in "Non -Nationalization of Currency".
It now look at Facebook with a market value of $ 500 billion in market value, but we have also seen a company with a large market value, and finally disappeared from zero. At that time, who was found? If the digital currency will eventually replace the physical currency gold and silver, and also replace the sovereign currency. In short, the challenge is the existing currency authorities and the major interest distribution behind it.
Of course, we think that the algorithm (mathematics) represents a higher level, and everyone can share the language. The Internet is also the same. It is more of a trust mechanism. Consensus narrative.
This based on the original state of real gold and silver, and later based on the trust of Sovereign Victoria, it has obviously disappointed us. Can digital currency be lived up to us? In fact, all the technical elites will have their own calculations, no matter how universal they are or have the spirit of people.
Libra may also succumb to the demands of capital and the dark part of the elite. This requires alertness.
Where will the key changes appear? Suppose that in the future, LIBRA can pass through a variety of supervisors and start slowly operating, and start the transformation of users. We feel that the fifth year is the real key, because it promises that in the fifth year Non -licensed chains have surrendered control and become a real Bitcoin or algorithm currency. At this time, it may be the beginning of a huge watershed.
If it really hand over control, its power is not enough to worry everyone, because it has been made public, anyway, there is no private interest, but what kind of problems will there be in such a converter? As the central bank's launch of digital currencies will cause major changes, we must observe carefully.
We response
What should we deal with? First of all, just like SDR, China can ask more shares, because there are 100 nodes, then you would like to put it in China's important nodes. Because of 10 million, you can enter a pit first. Isn't it that universal, open, and finally running towards a distributed network, can it be opened to the Chinese? This tests its ideal purity test gold stones.
The second one, of course, BATJ can create its own libra. Why did this time the global central bank reacting fiercely? Including China is now very open. In fact, China will definitely add Chinese Internet giants to the central bank to issue a digital currency in China ’s entire social and all application scenarios. The 24 node companies found by LIBRA are basically non -traditional financial giants in key areas, such as taxi scenarios, credit card scenarios, remittance scenarios. Of course, we also have strong e -commerce fields, social scenarios, and exchange scenarios. These are the good ecological structures that have more applications needed for digital currency.
On the other hand, I am in Shanghai in the Yangtze River Delta, because this area has sufficient financial infrastructure and physical industries, so there are a lot of application scenarios to learn to create libra. Choose a non -Internet giant, a digital currency alliance initiated by companies in the industry, or the alliance blockchain of the industry and finance. Because it has more realistic application scenarios, such as in the supply chain, in the supply chain, in terms of bills, credit reporting, in securitization, and land confirmation, etc., provides sufficient application scenarios to allow such a digital currency to operate. Operate in the way of the Alliance Chain 2B. Suppose that after ten years, open to other key players or become completely decentralized digital currency systems.
In the central bank's digital currency. In fact, it is sovereign libra. It is actually M0 mainly. Why does it mainly control M0 to replace cash? It is very simple. M2 still allows the market to decide to give it to the animal spirit of the economy in the economy, and it is handed over to the commercial bank itself.
M0 has a lot of things to do, such as point -to -point transactions, compliance issues, anti -money laundering problems, and even negative interest rates can be tested to solve. If you immediately intervene to a higher level of currency derivatives, it may trigger the central bank's comprehensive point -to -point control of the planned economy of all economies. This is unimaginable and unnecessary, and it is not able to do this.
So we need to look at digital currency problems with more open eyes. China often does not have the technology of others. It may be a tiny boat and a digital currency. It is essentially the competition about the power of science and technology and the industrial revolution. All must make more technical investment and innovation. Even in terms of global currency competition, such as the internationalization of RMB, not only do the RMB application overseas, but also its digital application.
can also consider the SDR or ESDR solution, not only only the RMB line, but the acceptance of multiple reserves may be higher. In this way, can RMB both internationalized and digital, scientific and technological. Judging from the latest news, the five currencies in the libra basket, including US dollars (50%), euro (18%), yen (14%), pound (11%), and Singapore (7%). It is said that it is said that it is easier to obtain the "pass" of the US authorities.
Obimated that the issuance of libra surpasses sovereignty. This stable currency is added with the existing currency system. It supports the US dollar or the US dollar as the main linked currency, which will strengthen the existing currency market pattern, that is, the United States is the United States is The ability to strengthen its sovereign currency with the power of technology, because Libra's last lender is still the Federal Reserve, and currencies are naturally a symbol of power.
If you just talk about digital currencies, you cannot create more value, or you need to return finance to entities, especially support for the industry. In China ’s past 70 years of experience, the biggest success should be said to complete the first and second industrial revolution, so whether China can continue to depend on how to trigger a new round of technology and industrial revolution. The transformation and upgrade of the Chinese economy will become its necessary financial infrastructure in a new round of industrial revolution?
I believe whether the algorithm, storage, computing power, and bandwidth can be solved under 5G and quantum computing. Digital currencies will eventually become a new round of technological revolution. The value of economic and new (data) assets, payment methods, wealth reserves, and world currencies must be a new world of digital currencies in the future.
(Author Shao Yu is the chief economist of Oriental Securities)
The editor Zhou Yuhua