What are the advantages of digital currency over traditional currencies?

1, saving costs and improving efficiency.

In the traditional electronic payment process, the funds are deposited on the third-party platform, and the third-party platform deposits funds through the time difference of payment to obtain short-term interest income, which makes customers and businesses suffer losses. The transaction process is redundant because of two fund transfers (especially cross-border settlement). Electronic payment based on blockchain technology eliminates the third-party platform and realizes peer-to-peer payment (P2P), thus simplifying the payment process and reducing the payment cost.

Statutory digital currency can be applied to a wider range of financial assets (even digital assets) payment and settlement arrangements. In the traditional non-centralized settlement of non-standardized equity, creditor's rights, derivatives, syndicated loans and trade financing, there are pain points such as long settlement time and low efficiency, but they can be integrated through a unified distributed scheme, and the central bank digital currency can directly pay for settlement, thus realizing economies of scale and promoting social cost saving and efficiency improvement. The director of digital currency Research Institute of the former central bank and the general manager of CSI Deng studied the role of statutory digital currency in factoring business, and found that the introduction of digital currency can not only simplify the operation and reduce the cost, but also solve the problem of capital flow safety control of reserved business and reduce the repayment risk. Benosetal evaluates the application of distributed technology in securities settlement and thinks that it has great potential.

2. Optimize the traditional payment function.

The payment function of traditional legal tender (cash) has many shortcomings, but modern society still needs a lot of cash. However, cash payment in kind can not be settled quickly and remotely, and it is not suitable for large-scale payment. It will be used for tax evasion and illegal economic activities, causing governance problems. Therefore, after the rise of electronic payment, the voice of "abolishing cash" continues. Digital currency can inherit the advantages of cash payment (point-to-point payment, instant payment and settlement, convenience and quickness), and at the same time can solve the shortcomings of cash: first, digital "casting", circulation and storage, low distribution cost and transaction cost; Second, it has the universality and ubiquity of payment, and can complete payment in various media and channels; Third, through the * * * identification mechanism and time stamp, digital recording and tracking are allowed to ensure the openness, transparency and traceability of electronic payment transaction information, which is helpful to reduce informal economic activities and combat money laundering and terrorist financing. Under this condition, controllable anonymity is realized at the same time, that is, compared with traditional mobile payment, the personal information of each participant is effectively protected by digital signature to prevent the user's personal information from being lost, leaked or maliciously tampered with.