Editor’s note:
Amidst heated discussions and controversies, the digital RMB has accelerated its implementation in policies and scenarios.
On September 21, the overall plan of the China (Beijing) Pilot Free Trade Zone was announced, proposing to support the People’s Bank of China Digital Currency Research Institute to establish a financial technology center, build a legal digital currency pilot zone and a digital financial system, relying on the People’s Bank of China Trade Finance Blockchain Platform , To form a trade finance blockchain standard system, and strengthen regulatory innovation.
On the same day, the People’s Bank of China Digital Currency Research Institute and JD Digital Technology officially reached a strategic cooperation. Based on the digital RMB project, the two parties jointly promoted the development and construction of mobile basic technology platforms and blockchain technology platforms; combined with the existing scenarios of JD Group, Jointly promote the innovation of digital renminbi mobile application functions and the landing application of online and offline scenarios, and promote the ecological construction of digital renminbi wallets.
According to the 21st Century Business Herald reporter, in addition to transfers, payment and other scenarios, digital renminbi has also begun to test the “credit card repayment” traffic entry level scenario.
Continuous policy support
In terms of policy measures, the Beijing Free Trade Zone will support the People’s Bank of China Digital Currency Research Institute to establish a financial technology center, build a legal digital currency pilot zone and a digital financial system, rely on the People’s Bank of China’s trade finance blockchain platform to form a trade finance blockchain standard System to strengthen regulatory innovation.
This is another clear support for the construction of a digital currency pilot zone. This year, Suzhou also announced that it has been approved to carry out three major innovation pilot projects, a national small and micro enterprise digital credit investigation experimental zone, digital currency, and financial technology innovation supervision.
According to an article published in the magazine “China Finance”, the head of the central bank, the People’s Bank of China began research on legal digital currencies in 2014. The Digital Currency Research Institute of the People’s Bank of China was formally established in January 2017. As of April 2020, it has been a digital currency 22, 65, and 43 patent applications were submitted and related content, covering the entire process of issuance, circulation, and application of digital currency, forming a complete industrial chain, having completed technical reserves, and having the conditions for landing.
However, on August 25, Sun Guofeng, Director of the Monetary Policy Department of the People’s Bank of China, stated at the State Council’s regular policy briefing that the current digital RMB research and development work is following the principles of “steady, safe, controllable, innovative and practical”. Suzhou, Xiong’an, Chengdu and future Winter Olympics scenes will conduct internal closed pilot tests to test theoretical reliability, system stability, function availability, process convenience, scene applicability and risk controllability. Sun Guofeng said that the digital renminbi is still in the internal closed pilot test stage, and there is no timetable for its official launch.
Currently, the digital renminbi pilot program is still “4+1”, that is, internal closed pilot tests will be conducted in Shenzhen, Suzhou, Xiongan New District, Chengdu and future Winter Olympics scenes, and there is no change. Shenzhen, Suzhou, Xiong’an, and Chengdu are representatives of the Guangdong-Hong Kong-Macao Greater Bay Area, the Yangtze River Delta, Beijing-Tianjin-Hebei, and the central and western regions. The People’s Bank of China is conducting digital RMB pilot tests in these four places.
“A few days ago, we conducted a large-scale test, mainly internal bank employees, some civil servants, to test the usability of the digital currency, and run the system first.” A person from the South China branch of a large state-owned bank said.
On August 27, CCTV stated that various tests and preparations for the digital currency of my country’s central bank are proceeding in an orderly manner. In Shenzhen, the internal testing of digital currency is being carried out in an orderly manner; in Suzhou, some civil servants have received part of their salaries in the form of digital currency; in Xiongan New District, 19 companies including McDonald’s have begun to pilot digital currency. It can be expected that although it is not the same thing as Alipay and WeChat Pay, in the future digital currencies will be as ubiquitous as Alipay and WeChat Pay.
On September 14, Fan Yifei, vice governor of the People’s Bank of China, wrote an article that from the perspective of M0’s fee system, the digital renminbi is a public product provided by the central bank to the public, without interest, and the central bank does not charge for services such as exchange and circulation. From the perspective of the M0 issuance model, commercial banks should assume the function of exchanging digital renminbi to the public. In order to ensure the security and stability of the digital renminbi system, it is necessary to prudently choose a commercial bank with strong capital and technology as the designated operating institution to take the lead in providing digital renminbi exchange services. Under the premise of centralized management by the central bank, both stability and innovation will be explored to explore cooperation models between designated operating institutions and other commercial banks and institutions to jointly provide circulation services for digital renminbi.
The scene accelerates to land
At the same time, the testing and implementation of digital RMB scenarios is accelerating.
On September 21, JD Digital announced that the Digital Currency Research Institute of the People’s Bank of China and JD Digital have formally reached a strategic cooperation. The two parties will jointly promote the development and construction of mobile basic technology platforms and blockchain technology platforms based on the digital RMB project; And combined with the existing scenarios of JD Group, jointly promote the mobile application function innovation of digital renminbi and the landing application of online and offline scenarios, and promote the ecological construction of digital renminbi wallet.
In addition, according to the 21st Century Business Herald reporter, in addition to transfers, payment and other scenarios, digital renminbi has also begun to test the “credit card repayment” traffic entry level scenario. Credit card repayment is an entry-level application. In terms of APP functions such as Alipay and WeChat Pay Wallet, credit card repayment is its core traffic source.
A big banker said that the digital RMB pilot application scenarios mainly focus on small, retail, and high-frequency business scenarios, which are similar to the use scenarios of electronic payment platforms, and the payment experience is similar. The biggest problem is whether to connect to third-party payment and obtain the merchant terminal.
According to the reporter’s communication with many industry insiders, digital renminbi is still being piloted on a large scale in Shenzhen, Suzhou, and Xiong’an New District. The four major banks are developing their own proprietary digital renminbi apps. Some banks’ apps are called ” “Digital RMB”, some banks use animal names.
The 21st Century Business Herald previously reported that on August 29, China Construction Bank opened the central bank’s digital currency wallet on a test basis, and added two sub-menus of “digital wallet recharge” and “digital currency” to its official APP. Users can transfer from their bank cards Current deposits are converted into digital currencies. The bank’s “digital renminbi wallet” currently has functions such as payment, collection, scanning, and transfer. Payments can be made through QR code scanning and NFC “touch” payments. Actual measurement found that at present, only accounts in pilot areas can apply for a digital RMB wallet.
However, later in the day when it went live, the feature was closed. In response, CCB responded to the media that: CCB has carried out relevant functional tests on the mobile banking system, and this test has now ended. Currently, online information is the test content in the technology research and development process, and it does not mean that the digital renminbi is officially issued. For some users who have opened a wallet and recharged, the system has automatically cancelled the account, and the money transferred by the user has been returned to the original savings account.
