PANews reported on November 2 that according to the Digital Legal Currency Research Society, Lu Lei, deputy governor of the People's Bank of China, said in the preface to "Money Theory" that if the central bank can have no bottom line and the currency issuance can have no upper limit, then the currency is likely to be replaced by other general equivalents-such as digital assets and stablecoins whose market value is currently fluctuating upward. Is this really the case? As a researcher who has been engaged in central bank research for a long time, the idea that comes to my mind is that the urgent problem facing major developed economies is to "save the central bank from the hands of central bankers." Although this idea is by no means the current central bank digital currency (CBDC), because I believe that CBDC has no institutional meaning of changing the increase in money, but is there a digital currency that can overcome the impact of various digital assets, achieve the stable currency effect, and maintain the existence of sovereign currency (solving the problem of monetary unification but fiscal decentralization of the euro)?
The increasing cost of certain assets (such as digital assets) has led to their opposite, lacking the liquidity required as a general equivalent (i.e. being collected rather than circulated, which is the fate of precious metals when they exit currency).
In the field of monetary economics prediction and practice, there are two people who deserve high respect - Robert Mundell, who just passed away, and Satoshi Nakamoto, whose identity is still unknown. The former insisted on the idea that exchange is a redundant transaction cost throughout his life, and experienced the practice of the single currency area theory in the euro area, but there is no dollarization utopia and it is difficult to achieve it. The latter watched the bitcoin he created evolve into an extremely expensive digital asset. At present, the energy consumed by the world to mine the last 2 million coins each year is enough for hundreds of millions of people to use for more than a year. According to the marginal cost pricing method, the closer Bitcoin is to an asset, the farther it is from a widely circulated currency. So, what might the world currency (or world monetary system) in the digital age look like?
At present, digital assets are following the old path of the gold standard. The idea of stablecoins is nothing more than a realistic formulation of the "soft version" of the optimal currency zone theory. Our ideas are not necessarily better than the White Plan of 1945. It's just that in the digital age, old wine has a new label.
