Since the birth of bitcoin in 2008, in slightly more than 10 years, digital currency has rapidly penetrated into people’s daily communication.

In June 2019, Facebook launched a white paper on the digital currency Libra project, which is planned to be officially launched in June 2020. For a time, there seems to be a relatively clear timetable for the real application of digital currency. The exposure of the digital currency DC / EP project of the Central Bank of China has also increased significantly since the second half of 2019.

Analysis on the development route of the central bank and traditional financial institutions to promote the digital currency project

Summarizing the existing concepts, these digital currencies can be divided into two categories: Official and private. When ordinary people talk about digital currency, they often subconsciously link “digital currency has more or less” subversion “to the existing financial system. Therefore, there is a dispute between the official and private routes on the route selection of digital currency in the future. This debate is similar to the debate on Internet standards in the 1970s-1980s.

The 1970s-1980s was a period when the Internet took root from the LAN era before a hundred flowers bloom to the Internet era of real interconnection. Before that, the standards of the Internet were also full of tricks, including the later Internet standard TCP / IP. These standards can be regarded as folk standards. In 1981, the international organization for Standardization (ISO) launched the OSI (Open Systems Interconnection) standard. Although ISO is not an official organization in the strict sense, and its standards are not mandatory, it is undoubtedly more official and authoritative than those organizations including TCP / IP standards. It is for this reason that after the introduction of OSI standard, many authorities and experts gave it high hopes at that time. As an Internet standard, OSI still occupies a place in many textbooks.

But 40 years later, looking back, more accurately, in the 1990s, TCP / IP as a recognized standard of the Internet has been established. What’s more embarrassing is that the so-called technically better OSI standard seems to have never really been implemented. The failure of OSI standards can be summarized into the following reasons. First, the rise of the Internet is a spontaneous market behavior, and the recommended standards of standardization organizations have no special official support compared with market standards. In fact, the United States has always been the leader of the Internet. Although TCP / IP is a private standard, its supporters and beneficiaries are mainly American companies, which essentially represents the interests of the United States. Second, the OSI standard has been launched late, and an ecosystem and interest circle have been formed around TCP / IP. As a standard, OSI does not have a strong promoter and stakeholder. Third, the emergence and popularization of the Internet is a process of continuous improvement of penetration and continuous iteration of technology driven by application. The convenience of application for promotion is more important than the completeness and authority of technology.

Different from the Internet, the dispute over standards occurs in the process of the Internet from 0 to 1. Bitcoin, blockchain and digital currency are all things from the beginning to the end of the Internet. Regulatory authorities and traditional financial institutions are aware of the Internet and its iteration and subversion. From the perspective of sharing economy and digital currency, the frontier of Internet innovation in recent years, Internet innovation is advancing more and more towards the field of public economy. What are the responsibilities and obligations of Internet infrastructure, especially platform companies? How to supervise? The public and regulatory authorities are also thinking more and more. The Internet and its innovation are facing more and more strict supervision. It is the general trend to assume more responsibilities and obligations.

Therefore, in the field of digital currency with strong public attributes and high regulatory density, it is difficult to reproduce the phenomenon of the rise of emerging forces and the subversion of traditional forces. The experience of Libra project white paper since its release is a process of continuous recognition by regulators. In a sense, regulators’ awareness is in place, and supervision in place will help the rapid development of digital currency. The author believes that in the field of digital currency, the competition between the digital currency launched by the central bank or traditional financial institutions and the digital currency launched by the new forces of the Internet should not reproduce the situation that the official OSI standard is completely defeated by the private TCP / IP standard in the dispute over Internet standards.

However, if the central bank and traditional financial institutions promote the digital currency project, they can not take it for granted that relying on the force of law and the advantages of incumbents, even combined with the first mover advantage, they will be widely promoted and applied, which can effectively marginalize the living space of digital currency for new forces.

The subversion of the Internet still exists. The existing currency issuance and circulation and its corresponding financial system are essentially the product of the rise of traditional modern countries and industrial division of labor. The Internet division density index is higher than the industrial division density, which is different from the relatively parallel division and cooperation mode between the financial industry and other economic sectors in the era of industrialization. A large number of financial behaviors are embedded in the use scenario under the Internet mode. The Internet has become the preferred scenario for the use and derivation of many currencies, which makes traditional financial institutions inferior to the new forces of the Internet.

In short, it is difficult to reproduce the complete defeat of OSI standard in the Internet standard dispute in the field of digital currency, but the complete defeat of OSI standard is still a wake-up call for the traditional financial sector.

Responsible editor; zl

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