Affected by the COVID-19 epidemic, the world is riding the wave of digital currencies at an accelerated pace.
With electronic payments becoming a popular payment method worldwide, digital currencies have also become the most widely used form of money today. Whether it is a legal digital currency, virtual currency, recognized institutional digital currency, or other various forms of digital currency taking turns, the question is: who will be the next new Alpha to occupy a new field and open a new chapter in the world’s monetary history?
Li Lihui, former Governor of the Bank of China and Head of the Blockchain Research Working Group of the Internet Finance Association of China, once said in a live broadcast that digital currencies will likely reconfigure the global monetary system, and the birth of super sovereign digital currencies will fundamentally reconfigure the global monetary system.
Li highlights three catalysts: first, digital currencies will transcend national sovereignty.
Second, digital currencies will be adopted and used by central banks. Third, digital currencies will be interoperable amongst banks.
Specifically, a super sovereign digital currency may impact the status of other sovereign currencies. The status of money as a general equivalent essentially depends on public trust, and legalization only strengthens public trust. Shell as the original currency is not due to legalization, but rather the public recognition of the value.. Weak countries that experience major economic difficulties may lose national trust in their sovereign currencies and may be replaced by super sovereign digital currencies. The sovereign currencies of developed economies generally may become the anchor of the super sovereign digital currencies. Second, the super sovereign digital currency may reshape the position of monetary hegemony. The status of the super sovereign digital currency will be determined by the size of the users and the size of the physical assets covered. It is possible that several evenly matched super sovereign digital currency systems will emerge globally, and super sovereign digital currencies in global circulation, perhaps without a clear national label, will be most importantly publicly recognized as global commercial credit and global digital trust. Third, super sovereign digital currencies may form a financial system that cuts across commercial banks. For example, he said that a digital currency like Libra is likely to evolve into a super-sovereign digital currency, forming a financial infrastructure that can cover all corners of the globe. It may start from payment clearing and gradually enter the fields of savings, financing, and investment, insurance asset trading, etc., penetrate into the economic life of the common people, and fully compete for the market the financial industry and banking industry. In addition, Li Lihui raised a concern about the RMB. He believes that the birth of a super sovereign digital currency will affect the process of RMB internationalization. If the RMB fails to be included in a global digital currency system, it could potentially weaken the scope of its future influence.
In Li Lihui’s view, the emergence of a super sovereign digital currency will completely change the status of existing financial institutions. It is easy to see that neither sovereign countries, central banks nor commercial banks want a super sovereign digital currency to replace their current position and change the existing financial system. However, with the increasing development of blockchain and digital currencies, when institutions have a substantial user base and long-accumulated user trust, it is not difficult for digital currencies issued by institutions to be accepted and recognized by the public.
In order to avoid damage to their own interests and stifle the crisis that may be brought by the birth of super-sovereign digital currency, ACU cooperates with the central banks of various countries around the world to open up the blockchain and traditional financial channels, so that a new digital currency will be established with the combining forces of ACU and the respective legal tender. newly generated digital currency can complete global circulation and cross-border payment settlement. In this way, with the assistance of the ACU, traditional financial institutions not only solve the technical threshold of accessing the new global settlement system but also reduce the risk brought by the new popular digital currencies that may appear in the future. Not only maintaining the dominant position of the national currency in circulation but also even potentially enhancing the share of the national currency in international payments.
Currently, ACU is accelerating its cooperation with central banks around the world. Further ACU can propose differentiated services for the different needs of central banks in each country. When using ACU for cross-border payment settlement services, ACU is pegged to the legal currencies of different countries.
In Malaysia, ACU has launched ACUM, a digital currency pegged to Malaysia’s legal tender, the Malaysian Ringgit (MYR). Using ACUM to circulate in the global system not only realizes the exchange between the digital currency ACU, ACUM, and MYR, reducing exchange losses and exchange costs for users but also integrates MYR directly into the ACU global circulation system, realizing the global circulation of MYR and ensuring the share of the MYR in global circulation.
The ACU can be linked to gold assets, and legal tender …… with asset backing according to the local international transaction demand and asset pegging according to the central bank requirements of each country. In addition, for countries that have issued e-money, ACU provides electronic payment programs that can be applied globally to complete the global circulation of the country’s e-money.
In Thailand, ACU has specially launched the e-payment program ACU PAY, which connects Thai e-money to the program to help users complete their daily consumption and ensure the usage of Thai e-money in the country, and through the ACU PAY global payment system, the global influence of Thai e-money will be further enhanced. With ACU’s stable network system and many years of blockchain experience, central banks in each country can easily realize the technology upgrade. According to the needs of different countries central banks, ACU will provide blockchain applications that meet different requirements of central banks.
According to statistics, there are currently about 97 countries in the world where CBDC is in the research or development stage, and the number of addresses holding more than 0.1 bitcoins is at a new high.
However, no matter how sovereign digital currencies and virtual currencies develop, they are in their respective fields to continuously create new history, and the two are not connected to each other. They are divided into rivers and governed by each other. The cooperation between ACU and global central banks will break this deadlock. In the blockchain network built by ACU, through the intermediary role of ACU, traditional legal tender can be directly converted into new digital currency, and the new digital currency can be directly exchanged into local legal tender within the system, opening the exchange channel between legal tender and electronic currency in one click, and solving the worries of global financial institutions.