Wu Shuo learned that Lu Lei, a member of the Party Committee and Vice President of the People's Bank of China, stated in the preface of his 2021 work (Monetary Theory) that there are two individuals who deserve great respect in the field of monetary economics prediction and practice—Robert Mundell, who has just passed away, and Satoshi Nakamoto, whose whereabouts remain unknown to this day.
The former insists that the concept of redundant transaction costs in foreign exchange is a lifelong belief, having experienced the practice of the single currency area theory in the Eurozone, but it is difficult to achieve the utopia of dollarization. The latter watches helplessly as the Bitcoin they created evolves into an extremely expensive digital asset. Currently, the energy consumed worldwide to mine the last 2 million coins is enough for hundreds of millions of people to use for more than a year. According to the marginal cost pricing method, the closer Bitcoin gets to being an asset, the further it is from being a widely circulating currency. So, what might the world currency (or world currency system) look like in the digital age?
The proposal of Libra is centered around 'stablecoins'. Therefore, my students and I are conducting experiments based on free trade and investment agreements, designing a digital stablecoin based on floating shares and calculated exchange rates using artificial intelligence (AI) algorithms among contracting parties. Whether in the interbank market, within central bank balance sheets, or in retail transactions between households and enterprises, dual currency settlement and clearing of sovereign currencies and supranational stablecoins can be achieved. This is not a technical challenge.
It is worth noting that, according to Wu Shuo's inquiry, although this article drew attention after being published on November 1, 2024 (Digital Fiat Currency Research Society) on WeChat, the preface was written on May 11, 2021.
