Editor's note: This article is from Xiao Lei Kanshi (ID: kanshi1314), author Xiao Lei, reprinted by Odaily with authorization.
In 2009, the world was still full of anger over the world economic and financial turmoil caused by the US subprime mortgage crisis. The Federal Reserve maintained ultra-low interest rates on the one hand, and on the other hand began to increase the intensity of QE.
As the world currency, the U.S. dollar has many countries with U.S. dollar reserves. They have no say in the Fed's monetary policy and can only passively accept the shrinkage and dilution of U.S. dollar assets.
Zhou Xiaochuan, then governor of the People’s Bank of China, called for expanding the scope of use of the International Monetary Fund’s (IMF) Special Drawing Rights (SDR) to gradually replace the existing reserve currency with SDR.
At that time, SDR, as a special form of super-sovereign currency, was mainly composed of four currencies behind it, including the US dollar, the euro, the Japanese yen and the British pound. In the SDR weight, the US dollar accounts for more than 40%, and has a veto power. But in any case, SDR at least has a slightly more diversified endorsement assets.
At the end of 2015, with the continuous efforts of the Chinese government, RMB was added to the SDR endorsement assets, and the weight of RMB was second only to the US dollar and the euro, surpassing the Japanese yen and the British pound. It is considered by everyone to be the most important step in the internationalization of the RMB. .
But the problem is that the application scenarios of SDR are very limited, and it has little to do with all kinds of trade in the world, let alone the payment of ordinary people and the flow of cross-border funds.
In 2017, IMF President Christine Lagarde said at a meeting, please forget about Bitcoin and consider "IMF currency". Lagarde believes that it is more likely that the future world currency will come from the IMF. There are doubts about the possibility of digital currency in the future and whether SDR can replace the existing international currency, but this is not an unreliable assumption. Lagarde said the IMF needed to be prepared.
What the IMF did not expect was that its own plan began to have an executor, but this executor was not the IMF.
In a blink of an eye, on June 18, 2019, the US Internet giant Facebook announced that it will launch a blockchain-based digital currency (libra), which is used for international payments and capital flows, and its endorsement assets are the world's major legal currencies , and reliable government bonds.
Just two weeks later (July 6, 2019), IMF President Lagarde hinted at the Bank of England forum that the organization intends to launch a global digital currency similar to Bitcoin-IMF Coin based on the Special Drawing Rights (SDR) mechanism, Designed to replace the existing world reserve currency.
The problem is, no one seems to care about the IMF's plans anymore.
On July 15, 2019, Marcus, the head of the Libra digital currency project, announced in advance his testimony to be released in the U.S. House of Representatives, in which the endorsement assets of Libra are clearly the US dollar, the euro, the Japanese yen and the British pound.
Unfortunately, Libra's endorsement assets do not have RMB. And if the IMF promotes the IMF Coin, the renminbi, which is the third largest weight in the SDR, will become an important endorsement currency.
So if China wants to participate in this competition, should it support IMF Coin, promote its own digital currency, or find a way to intervene in the Libra system? I think this question needs to be thought about urgently.
For China, I personally feel that it is unrealistic to expect the IMF Coin to make a difference. The IMF itself is also an institution based on the US dollar system. Previously, the IMF was more inclined to focus on developing countries, especially raising the value of China and other countries. The United States is very dissatisfied with the right to speak and threatens to withdraw from the IMF.
We can boldly guess, if the assets endorsed by Libra are added to the renminbi, what method will the United States use to rectify Libra?
Moreover, the IMF has too many things to do. Its organization has existed for more than half a century. It has a serious bureaucratic atmosphere, is far away from the Internet, and cannot avoid various restrictions and endless discussions of governments. It is unrealistic to wait for IMF Coin to compete with libra because it touches the channels of individual users. That is to say, if the RMB wants to ride the IMF Coin’s free ride, I am afraid that it will have to pay a huge time cost.
Libra, which is most likely to realize the ideal of the IMF's world currency, does not have RMB in its currency basket according to the current plan. What is more noteworthy is that among the more than 30 initial institutions that Libra has cooperated with, there is not a single Chinese company. More than 90% are American companies, and there are also some companies from the United Kingdom, Canada, France, Sweden, the Netherlands and other countries.
From China's point of view, it may be considered that it is difficult for the US government to approve the birth of a new world currency to challenge the status of the US dollar, so it should not pay too much attention to projects like Libra. However, as the leadership thinking of the United States, there are two problems that the United States is actually more difficult to accept.
The first question is that the United States will never give up its leading innovation position in the field of digital currency and global payment business, that is to say, the United States will not give up its leadership competition for the future digital currency industry; the second question is , Libra will definitely not go against the dollar and the interests of the United States.
The person in charge of the libra project made it clear that “Facebook will not issue Libra digital currency until we fully resolve regulatory issues and obtain appropriate licenses. Libra will work with the Federal Reserve and other central banks to ensure that Libra does not compete with sovereign currencies or interfere with monetary policy.” .” In fact, the regulatory and sovereign currency here refers specifically to the United States and the US dollar.
So what reason does the United States have to prevent the launch of Libra? The discussions in Congress and the so-called proposals only increased the exposure of Libra, reduced the promotion cost of Libra, and output a large number of Libra's ideas and "lofty" ideals to achieve, which invisibly stimulated users' desire for Libra .
Therefore, the so-called regulatory pressure in the United States may not only prevent Libra from aborting, but it is even more likely that Libra will have the ability to continuously deliver Libra's functional details and shape its brand advantages. At the same time, the purpose of hunger and thirst marketing is achieved. It may be a strategy to delay the release of libra in various ways.
If you look at Marcus’s testimony, not only did Libra not change its product structure or goals due to the controversy of various parties and the pressure from regulatory agencies in various countries in recent times, but it has even more unabashedly clarified the launch of new products. world currency for this purpose.
Judging from the testimony of Marcus, creating a world currency is the only direction. That is to say, libra did not cater to the regulation, turning libra into an equity asset, or similar to the so-called software usage permissions and incentive mechanisms of many digital currencies (such as EOS or Ethereum, etc.), let alone an internal point system , Libra is to be a world currency and a payment tool.
The exact words of Marcus in his testimony are:
Libra will be designed as a digitally native currency that can be used anywhere in the world. Libra combines the characteristics of the best currencies in the world: stability, low inflation, wide availability, and fungibility. Libra is a payment tool, not an investment. People will not hold Libra like stocks or bonds, expecting to generate income or increase wealth. Instead, Libra is like cash. For example, people use it to send money to family members in other countries, or to make purchases. Because Libra will be backed by this reserve, anyone using Libra should have a high degree of confidence that they will be able to exchange it with their local fiat currency at the exchange rate, just like exchanging different currencies when traveling.
From Zhou Xiaochuan's call for expanding the use of SDR in 2009 to the emergence of libra ten years later, it was not a very long process. During this period, another thing is that Bitcoin has grown from zero to a market value of more than 100 billion US dollars, which has not been affected by the statements and opinions of central banks and regulatory agencies of various countries.
Finally, I suggest that everyone shift the focus of attention from the attitudes of various countries towards Libra, and seriously think about what kind of world currency the world needs in the future, how Libra will develop, and how such a world currency will lead new global interests. distribution pattern. That is to say, at the national level, what should be considered is interests, not right or wrong, because when you are entangled and adjudicating right and wrong here, people are finalizing the rules of the game that are most beneficial to you.
