Under the epidemic, the research and development of global digital currencies has advanced by leaps and bounds.

According to the latest statistics from the Bank for International Settlements (BIS), the proportion of central banks that have advanced digital currency to the empirical stage has exceeded 60%, a year-on-year increase of 20%; China has also carried out pilot projects for digital renminbi in many places; at the same time, Bitcoin has

The market capitalization exceeded the trillion-dollar mark.

On February 19, the International Monetary Fund (IMF) published an article titled "Public and Private Money Can Coexist in the Digital Age."

The authors of the article are Tobias Adrian, Financial Advisor and Director of the Monetary and Capital Markets Department of the IMF, and Tommaso Mancini-Griffoli, Deputy Director of the Monetary and Capital Markets Department of the IMF.

The article stated that throughout history, privately issued currencies and publicly issued currencies have always existed.

Today's world is also characterized by a dual currency system, where in addition to the central bank issuing public currency, various types of banks, telecommunications companies or specialized payment service providers also issue private currency.

On the one hand, the private sector provides innovation and diversification, and on the other hand, the public sector ensures stability and efficiency. While one aspect is enhanced, the other aspect is often weakened. It is up to each country, especially its central bank, to deal with the trade-off relationship.

The article proposes that the central bank should not just make one of two choices: either issue a central bank digital currency or encourage the private sector to provide its own digital currency.

The two can coexist and complement each other, for example, through certain design choices made by central banks and adjustments to their regulatory frameworks.

The article frankly stated that central banks must become more like Apple or Microsoft to ensure that central bank digital currencies are at the forefront of technology and become the main and preferred form of digital currency in user wallets.

The article believes that it is still possible to establish cooperative relationships with the private sector, and the central bank does not need to go it alone.

First, the design of a central bank digital currency can encourage the private sector to innovate on its foundation, just as app designers develop attractive features for mobile phones and their operating systems.

Access to an open set of instructions ("application programming interfaces") could extend the usability of central bank digital currencies beyond just providing ordinary e-wallet services.

Second, some central banks could allow other forms of digital currencies to exist simultaneously (similar to parallel operating systems) while leveraging the settlement capabilities and stability of central bank digital currencies, which would open the door to faster innovation and product selection.

This form of digital currency (called synthetic currency in the past) can be fully deposited with central bank digital currency.

It is worth mentioning that Agustín Carstens, President of the Bank for International Settlements, also emphasized in a recent speech that the central bank digital currency (CBDC) can and must be designed as a public-private partnership to maintain a two-tier financial system.

Only models in which the central bank directly provides retail services should be considered, and an important role for the private sector cannot be excluded.

Zhou Xiaochuan, former governor of the People's Bank of China, once pointed out in a public speech that digital renminbi (DC/EP) is a two-tier R&D and pilot project plan.

In the two-tier system of DC/EP, the People's Bank of China is on the first level, and on the second level there are commercial banks, telecom operators, and Internet payment platforms. They can cooperate or unite, depending on their understanding of payment products and

Understanding of technical frameworks.

Attachment: Public and private currencies can survive in the digital age. We value innovation and diversity—including in the currency field.

Throughout the day, we can pay by various methods such as swiping cards, mobile phones, and surfing the Internet, as well as paying with banknotes and coins - although in many countries, cash is used less and less.

Today's world is characterized by a dual currency system, where in addition to the public currency issued by the central bank, private currencies are also issued by various types of banks, telecommunications companies or specialized payment service providers.

This system, while not perfect, has significant advantages, including innovation and product diversification largely provided by the private sector, and stability and efficiency ensured by the public sector.

The goals of innovation and diversification on the one hand, and stability and efficiency on the other, are interrelated.

While one aspect is strengthening, the other is often weakening.

This is a trade-off that countries, especially central banks, must deal with.

To what extent should central banks rely on the private sector and to what extent should they rely on their own innovation?

Much depends on preferences, available technology and regulatory efficiency.

So when a new technology emerges, it's natural to ask how today's dual currency system will evolve.

If digital cash (called a central bank digital currency) does emerge, will it replace currencies issued by private institutions, or will it allow private currencies to flourish?

The first scenario is always possible – by imposing stricter regulations.