China Proposes International Rules For Digital Currency
China is proposing a package of rules for dealing with crypto currencies. The central bank in China has communicated these proposals to other ones and monetaries. Among other things, there are provisions for the use of digital money. But sensitive issues such as surveillance and the exchange of data are also negotiated.
Money flows should be synchronized to enable transactions for compliance. Central banks around the world are currently exploring possible models of their currencies.
The driving force is the ever faster digitization of the industry and payment transactions. In addition, cryptocurrencies such as Bitcoin are becoming more and more important. Digital money also offers the opportunity to make cross-border payment transactions more easily. Last but not least, the banks are also concerned with not losing sovereignty over currencies to the industry.
A Fair Supply Of Crypto Currencies Should Support Stability
According to China, a worldwide rule should include that there is a fair supply of crypto currencies from the central banks. This should support healthy development and the stability of the global monetary. A crypto currency issued by a bank should not affect the ability of another bank to fulfill its mandate for monetary and stability.
In Europe, the development is not that far. The ECB wants to decide in the middle of the year whether a plan should be started that prepares the introduction of a digital euro. However, there are also voices in the monetary community that argue for a more cautious approach. Other countries like the Netherlands are more willing to experiment.
At the BIS, they had previously said that central bank money could play an important role in supporting payments with smartphones in China. To do this, the monetary would have to step up their work. In the meantime, the everyday life of many Chinese people can hardly be imagined without mobile payment using services.
The contents of this article are for informational purposes only, and are not investment advice.