Cai Weide: In the face of digital dollar hegemony, positive competition is the right way

Recently, Cai Weide, the chairman of the Blockchain Industry Professional Committee, was invited to participate in the [Hunting Theme Event] to answer the recent hot spots in the blockchain industry. Related articles will be published in the near future, so stay tuned!

Introduction: Is it an ideal choice for the United States to support Facebook's stablecoin Libra in extending its digital dollar hegemony? Will the United States continue to occupy a leading position in the global digital economy in the future because of the leading advantages of Internet institutions and the acumen of digital economic policies? Will the European Union's vigilance and resistance to Libra delay the progress of the US digital dollar hegemony?

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Cai Weide

Chairman of China-Asia Economic Development Association Blockchain Industry Committee; Distinguished Expert of the National "Thousand Talents Program"; Doctoral Supervisor of Beihang University; Bachelor of MIT; Doctor of Computer Science at the University of California, Berkeley; 30 years; Scientific Advisor of the Blockchain Research Center of University College London; Chief Scientist of Tiande Technology; Director of Blockchain Internet Laboratory of National Big Data (Guizhou) Comprehensive Experimental Area; Honorary President of CCID (Qingdao) Blockchain Research Institute ; Director of the Blockchain Special Committee of Beijing Internet Finance Industry Association.

The following is President Cai's statement:

Figure: libra is an extension of the dollar

1. Facebook’s stablecoin is an extension of the dollar’s ​​hegemony

What happened on Facebook this time is that the United States is extending the hegemony of the digital dollar. This can be learned from the words of the Federal Reserve, the FDIC and the President of the United States, and David Marcus of Facebook directly claimed that if we don’t do it, others will. Whoever controls the protocol at this time controls the platform. So Facebook is an extension of dollar hegemony.

2. Facebook is ideal

Is Facebook an ideal choice? Yes, because Facebook has a huge market, Facebook is willing to embrace regulation, and Facebook has new technologies. Facebook has the three MaRT conditions, and several other units have not fully met these three conditions.

Will the US continue to lead in the digital economy? This is very possible. Regarding the blockchain, China and the United States began to understand it at almost the same time in 2015 and 2016, but since 2017, most of China's energy in 2018 has been devoted to issuing coins. In 2018, the formal financial sector and government of the United States began to enter the blockchain, while at the same time China closed the door to the blockchain.

3. China's financial system is conservative, preventing the development of China's digital finance

Moreover, such blockchain companies are not popular in China, because they cannot make money without issuing coins. In fact, the government did not support the development of the blockchain industry, and only focused on suppressing digital tokens. Chinese regulators are also suppressing blockchain applications. Sometimes I talk to the bank about starting with an experiment, but it turns out that the experiment is impossible! Is this the route for China to vigorously support the development of the blockchain financial industry?

After the Facebook incident in July 2019, after the shock of the world central bank and banks, China still chose to be conservative.

4. China closed its doors in 2018 and started to lag behind

In July 2018, the author said that China's blockchain is "accelerating behind"! Then this matter was officially confirmed in June 2019, because something as important as Facebook should have been known long ago, and the alarm information should have been released long ago. When Facebook announced the plan abroad, there were many reports that it was a major event in the world, and the author also quoted it in the article for a period of time.

Although various reports have come out long ago, it was only after the outbreak that the perception changed. China originally kept pace with the United States, but later fell behind. This is not a problem with technology, but a problem with cognition. Treating the new blockchain technology as a scourge, it is too late to suppress it, and I don’t understand why foreign regular troops have entered the field. We have failed to realize the importance of this issue and have been lagging and suppressing our development.

5. European regulators are sure to give Facebook trouble

Will Facebook have various problems in the future? It is very likely that various aspects of Europe will strengthen supervision on it, causing problems in Facebook's deployment in Europe. This problem may be solved within Facebook, the US government, and the US central bank, or there may be exceptions. This is a series.

But this is a tactical issue of delaying the attack. Time is exchanged for space, because Europe's own stablecoins will definitely come out, they must go through the same regulatory process, and the United States must treat European stablecoins equally. Therefore, in the end, the market (Ma) and technology (T) are resolved, and these are strategic issues.

6. Coping strategies

One of the strategies mentioned in the previous article is to formulate domestic regulations, encourage innovation, and develop related technologies in the long run. Internationally, cooperation with other financial institutions is also a strategic choice. This currency competition is a competition in a multinational environment, not a one-on-one competition. The strategies of Su Qin and Zhang Yi in the Warring States Period are still equally useful. Even Facebook has to register in Switzerland (equivalent to cooperating with Switzerland) to complete its plan, let alone in China where the foreign exchange market is not strong?

7. Common people welcome, Facebook will develop first in other regions

However, Facebook may not be released next year, and it may not be launched in Europe immediately. It can be launched in other countries such as the United States first, and then expand slowly. And ordinary people in many countries may very much welcome the arrival of Facebook's stable currency!

Where the legal currency of some countries is weak, the common people will use it. Don't say anything about the people of small countries, the Chinese people may welcome it. As soon as you go abroad, you can immediately open a Facebook account. After you open it, you can use it anywhere in the world. You don’t need to queue up at the bank to fill out forms for cross-border payments. Common people in Europe may also take the same path. If the European Central Bank does not approve it, other countries will definitely approve it. Open an account in an open country. Because Facebook's stable currency is much more convenient than bank remittances, transactions can be done with a mobile phone. How does the bank's traditional remittance method compare to Facebook's stable currency today?

8. Frontal competition is the right way

The serious warning of the International Monetary Fund in September 2017 has finally come. This is not a problem that can be solved by containment (such as the introduction of strict rules in supervision) or self-control, but positive competition.

The initiation report was submitted on November 22, 2018, and the establishment was approved by the China-Asia Economic Development Association on December 14, 2018. It was formerly known as the "Small and Medium-sized Enterprise Promotion Association", which was established under the supervision of the Ministry of Foreign Affairs and approved by the China-Asia Economic Development Association. The committee actively carries out exchanges and cooperation with the blockchain industry of various countries in the world, and serves my country's small and medium-sized enterprises and social economy through the formulation of industry standards, investment promotion, industrial integration, economic and trade exchanges, information consultation, rights protection, and corporate social responsibility. , to make due contributions to the country's "Belt and Road" initiative.

"Blockchain Industry Professional Committee"

The initiation report was submitted on November 22, 2018, and the establishment was approved by the China-Asia Economic Development Association on December 14, 2018. It was formerly known as the "Small and Medium-sized Enterprise Promotion Association", which was established under the supervision of the Ministry of Foreign Affairs and approved by the China-Asia Economic Development Association. The committee actively carries out exchanges and cooperation with the blockchain industry of various countries in the world, and serves my country's small and medium-sized enterprises and social economy through the formulation of industry standards, investment promotion, industrial integration, economic and trade exchanges, information consultation, rights protection, and corporate social responsibility. , to make due contributions to the country's "Belt and Road" initiative.