Deputy Director of the State Administration of Foreign Exchange: Under certain conditions, central bank digital currency will have the opportunity to become broad money

ChainCatcher news, according to Beike Finance, Lu Lei, deputy director of the State Administration of Foreign Exchange, stated at the "2023 China (Beijing) Digital Finance Forum" that the essence of all financial activities is inter-temporal trading, with currency and interest rates being the core. In the existing model, central bank digital currency (CBDC) is primarily positioned as a cash-like payment certificate (M0), which is a non-interest-bearing high-powered currency.

Lu Lei pointed out that assuming the programmability of digital currency, if smart contracts regarding interest rates are loaded onto the central bank digital currency, it will have the opportunity to become broad money (M2). He hopes that the exploration by the Institute of Digital Research can achieve the adjustment of the central bank digital currency interest rate through monetary policy, reaching macro-control objectives. The programmability of central bank digital currency provides innovative space for enriching the central bank's monetary policy tools, but it must be said that this is a common challenge faced by central banks worldwide.