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 payment in China has provided the public with convenient and efficient retail payment services, which boosted development of the digital economy, helped the public get used to digital payment, and created higher demand for technology and new services. Meanwhile, a safer, more inter-operable and more inclusive retail payment infrastructure which meets diversified payment needs is an important public good for higher quality growth. Such infrastructure will deliver better and more efficient basic financial services, ensure smooth domestic circulations, and support the building of a new development paradigm.

1.2 The functions of cash and the environment of using cash are changing profoundly.

As the digital economy develops, the share of transactions using cash is declining in China. According to a survey conducted by the PBOC in 2019, the number and value of transactions via mobile payment accounted for 66 percent and 59 percent of the total, while those paid in cash accounted for 23 percent and 16 percent, and those paid by card 7 percent and 23 percent, respectively. Among those surveyed, 46 percent used no cash in any transaction during the survey period. It should be noted, however, from end-2016 to end-2020, cash in circulation (M0) registered RMB6.83 trillion, RMB7.06 trillion, RMB7.32 trillion, RMB7.72 trillion and RMB8.43 trillion, respectively, representing a small rise. In the areas where financial services are less available, in particular, cash usage is still quite common. Meanwhile, the cost of cash management is quite high. Every element in the cash cycle consumes much human, physical and financial resource. Such elements include banknote design, minting and printing, transportation, deposit and withdrawal, identification, processing, reflow, destruction, counterfeit prevention and etc.

1.3 Cryptocurrencies, especially global stablecoins (GSC), have developed rapidly.

Since the creation of Bitcoin, the private sector has launched a variety of so-called cryptocurrencies. According to incomplete statistics, there are over 10,000 kinds of cryptocurrencies which have gained some influence, whose total value exceeds USD1.3 trillion. Adopting blockchain and encryption technology, cryptocurrencies such as Bitcoin are claimed to be decentralized and entirely anonymous. However, given their lack of intrinsic value, acute price fluctuations, low trading efficiencies and huge energy consumption, they can hardly serve as currencies used in daily economic activities. In addition, cryptocurrencies are mostly speculative instruments, and therefore pose potential risks to financial security and social stability. Moreover, they have been employed as payment instruments for money-laundering and other illegal economic activities. To tackle the relatively big price fluctuation concern of cryptocurrencies, some commercial institutions launched so-called "stablecoins", and tried to stabilize their values by pegging them to sovereign currencies or related assets. Some commercial institutions even plan to launch global stablecoins, which will bring