The paper “Research Progress of Digital Money Theory and Practice”, written by Professor Jianjun LI and doctoral student Yechen ZHU of the School of Finance, was published in the 10th issue of “Economics Perspectives” in 2017 and reprinted in the 2nd issue of “Xinhua Digest” in 2018.

Abstract: Recently, with the development of financial technology, such as block chain, big data and cloud computing, the innovation and rapid development of digital currency has become the focus of attention all over the world. Central banks in many countries are actively studying the feasibility of issuing digital currency technology, which has pushed the theory and practice of digital currency into a stage of prosperity. This paper summarizes the technological and practical origins, the evolution of theoretical models and the practice progress of digital currency. We try to summarize the evolution law and trend of digital currency, and analyze the possible impact of digital currency on sovereign countries’ and the global financial system. This paper draws the following conclusions. Technology promotes the evolution and innovation of currency form. Digital currency itself belongs to credit currency and must be controlled and issued by the central bank. In the future, the sovereign digital currency issued by the central bank may be used as a supplementary legal currency. Monetary authorities should strengthen the regulation and supervision of private digital currency. Because of its lack of credibility and strong speculation, application of private digital currency should be strictly controlled within a certain range. Illegal financing activities using private digital currency should be firmly banned.

Keywords: Central Bank Digital Currency; Private Digital Currency; Virtual Currency; Block Chain Technology