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"Emerging technologies such as blockchain and distributed ledgers have promoted the vigorous development of central bank digital currencies and stablecoins, realizing 'payment as settlement', reshaping the traditional payment system from the bottom, greatly shortening the cross-border payment chain, and posing huge challenges to financial supervision." ”

Why talk about stablecoins?

Let's talk about the background of Pan Gongsheng's statement.

President Pan first mentioned the international monetary system. He pointed out that the international monetary system is evolving from a dollar-dominated landscape to an era of healthy competition among a few strong sovereign currencies. The implication is that the Renminbi will also play an important role in the future.

In fact, during the process of challenging the dominance of the US dollar, the euro has actually provided us with a particularly positive example.

The euro was born in 1999, and it currently accounts for 20% of global foreign exchange reserves, which has only taken less than 30 years.

I think that aside from the strength of the European economy itself, it is also very important for the world to have a backup option besides the US dollar.

With the development of the Chinese economy, this backup tire cannot only be euros. In fact, the internationalization of the renminbi has also been very rapid in recent years.

Pan Gongsheng revealed that currently, the renminbi has become the world's second-largest trade finance currency.

Note that the second largest trade finance currency is mentioned here. Why is it a trade finance currency?

This is not difficult to understand, as China's real trade settlement demand is very large as the world's factory, and the flow of goods and the flow of currency are closely integrated.

After discussing the international monetary system and its evolution, Pan Gongsheng immediately talked about the cross-border payment system. The underlying implication is not hard to understand: only with a strong global cross-border payment system can funds flow globally, and the internationalization of sovereign currencies can develop faster and better.

In the past ten years, the central bank has been working with Chinese-funded banks to build a system for the internationalization of the renminbi, which includes offshore clearing banks and the renminbi cross-border payment system.

After the emergence of stablecoins, the cross-border payment system is facing a new round of technological upgrades, and the competition between countries for the dominance of the global monetary system is first of all to use the user experience of the currency. Cross-border payment entities may give up using RMB for payment and settlement due to cost, efficiency and other issues.

Therefore, from the perspective of currency competition, if this thing can enhance the user experience of currency, we should have what the United States has.

After the emergence of stablecoins, the cross-border payment system is facing a new round of technological upgrades, and the competition between countries for the dominance of the global monetary system is first of all to use the user experience of the currency. Cross-border payment entities may give up using RMB for payment and settlement due to cost, efficiency and other issues.

Therefore, from the perspective of currency competition, if this thing can enhance the user experience of currency, we should have what the United States has.