Digital currencies are mostly just a new type of money’s carrier, which has no influence on money’s credit. If the People’s Bank of China issues digital legal tender, it’s still the central bank - the state – credit, said CF40 member Zhong Wei, 1/6. cf40.org.cn/uploads/newsle…
Digital #currencies are mostly targeted at individuals and the retail business and it replaces M0; it has hardly any influence on the wholesale industry, institutions or real-time transactions in large amounts. 2/6
In addition, supplies of #money and demands for credits are two things that should be viewed separately. For example, we now often refer China’s monetary policy as “loose money and tight #credit”. 3/6
#Centralbanks can provide monetary base, but they cannot provide social credits, as credits are not supplies, but demands. The development of the whole system - from money to credits - is based on the transmission function of the financial market and financial intermediaries. 4/6
If central banks directly issue digital currencies to individuals under a single-tier issuance framework, we would have a lot of troubles, as central banks could only issue money, but not credits. 5/6
As a result, the entire social credit system could collapse. Thus, such a single-tier issuance framework is totally unfeasible. 6/6
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