Editor’s note: The progress of the digital RMB pilot program is highly anticipated. It has been six years since the People’s Bank of China established a dedicated research team, and the digital renminbi has first revealed itself. It is currently being tested in Shenzhen, Suzhou, Xiongan, Chengdu and other places. The digital renminbi red envelope tests recently launched in Shenzhen and Suzhou have allowed tens of thousands of people to participate, and the digital renminbi footsteps are getting closer. There is no timetable for the official issuance of the digital renminbi, but before it actually comes, we need to understand or even read it through.
Digital RMB flowers and applause continue. How far is it from popularization and official release?
According to the questionnaire on the perception of digital renminbi issued by The Paper, the data collected from 526 questionnaires show that people have strong confidence in the popularization of digital renminbi. 55.13% of the respondents believe that the digital renminbi will be launched within 1-3 years, 20.72% of the respondents believe that it will be launched within 3-5 years, and the proportion of respondents who choose to believe that the digital renminbi will be launched within one year is 14.64 %.
“I personally think that one year is the lowest. It is possible for more than one year or two years. If everything is okay, then promotion can be said.” Hu Jie, a professor of practice at the Shanghai Advanced Institute of Finance of Shanghai Jiaotong University, told The Paper News reporter that currency issuance The authorities often take a very cautious attitude in currency issuance, so the first batch of pilots will not be short.
When we look forward to its launch, the possible risks and challenges of digital RMB are also worth thinking about.
How to ensure the security of “offline payment”
Wang Zhicheng, associate professor of finance at Guanghua School of Management, said: “The matter of offline seems to be simple. I think this is the bigger problem that the central bank will face when launching digital currency.”
He said that on the payment channel, the problem of switching from offline to online is not as simple as imagined. How to design the time for the digital currency from offline to back online is difficult to solve. Due to the easy duplication and easy modification of data and electronics, security and condition setting in the offline phase will face many difficulties. For example, the offline setting time limit and the setting time limit for returning have a lot to do with anti-money laundering and security. “From the user’s point of view, how is the performance, is it safe, and whether it has the same or better experience as using WeChat Pay or Alipay. If the user experience of the central bank’s digital currency is slightly worse, it will actually be very restrictive. Later application promotion.” said Zou Chuanwei, chief economist of Wanxiang Blockchain, “From the perspective of the People’s Bank of China, how to prevent money laundering, terrorist financing, and tax evasion after the implementation of the central bank’s digital currency must be tested. If these are not met, the integrity of the financial system is impaired.”
Zou Chuanwei also pointed out that at present, third-party payment has established a huge online and offline acquiring system. “How to use these existing work to promote the application of central bank digital currency and improve the security and efficiency of the current payment system is a very complex issue. .”
In addition, Hu Jie also believes that it remains to be seen how much the central bank’s digital currency can have practical applications in the future.
How to prevent counterfeit digital RMB wallets
Wang Yongli, the former deputy governor of Bank of China, pointed out that special attention should be paid to the fact that the “digital RMB APP” must become a unified portal for the entire society’s digital renminbi. The central bank must form and operate a digital renminbi account for the entire society, and thus form an account that covers all The massive database of user information and transaction data of the digital renminbi. The digital renminbi system must be open source. The download and link of the “digital renminbi APP” must be free and convenient, but this poses a great challenge to system security and APP anti-counterfeiting .
In fact, according to Mu Changchun, director of the Central Bank’s Digital Currency Research Institute, revealed at the second Bund Financial Summit that fake digital RMB wallets have been found on the market.
Mu Changchun said: “Like the era of paper money, the People’s Bank of China is still facing the problem of anti-counterfeiting and anti-counterfeiting. In the era of paper money, the cost of anti-counterfeiting and anti-counterfeiting is high. In the era of digital RMB, we need to reduce the cost of anti-counterfeiting. Coordinate the construction of a digital renminbi wallet ecosystem so that it can be easily identified by the common people. At the same time, on the other hand, operating agencies must also develop their own special functions to provide richer payment and financial products.”
Wang Yongli said in the article that from the current operating system, the problem of counterfeit apps cannot be completely eliminated at the login entrance. He wants to rely on the digital RMB wallets of its operating service agencies, especially the digital RMB screens in the wallets, for anti-counterfeiting. , It is almost impossible. At the same time, the high-speed operation and maintenance and security protection of the digital renminbi system and high-frequency trading are also extremely important, and they will also put the central bank under tremendous pressure and challenges. In this regard, how to effectively deal with it must attach great importance to it and form a sure implementation plan.
Study and deal with possible financial risks in advance
Digital RMB will cause changes in the financial sector, and will it bring risks and challenges to the financial sector?
Li Lihui summarized three points at the 2020 Financial Development Summit Forum organized by The Paper: First, legal digital currency may weaken the initial credit ratio of commercial banks, because the central bank can directly absorb deposits through legal digital currency, so commercial banks must increase accordingly. The level of interest rates guarantees senior deposits and credit. Second, legal digital currency is more likely to trigger systemic financial risks. In the state of digital currency, once a financial institution has a problem, it may have a greater impact. Third, the central bank has the power to regulate and control the currency market, and will therefore assume more responsibilities. When a financial crisis occurs, the central bank must provide greater liquidity support to the market.
Li Lihui said that my country’s legal digital currency implementation path needs to be further improved, especially the design of its underlying technical architecture and application scenarios to ensure large-scale and reliable applications in the high-concurrency market. “We have to consider how to ensure the reliability of the system operation in the case of the digital currency RMB overflow. At the same time, it should be necessary to further study the feasible path and implementation plan for issuing a global digital currency led by China.”
How to effectively protect user privacy
Data privacy protection is a common concern.
The Paper issued an online questionnaire on the public’s perception and acceptance of digital renminbi. The results of the 526 returned questionnaires showed that 71.43% of the respondents had privacy concerns when using Alipay and WeChat Pay.
Zhou Xiaochuan, the former governor of the central bank, stated that digital currency transactions require controlled anonymity, which means that both anonymity and complete anonymity cannot be achieved. It is necessary to ensure that regulators, especially anti-money laundering agencies, can grasp these data. On this basis, To maximize customer privacy protection.
Zhou Xiaochuan advocated that some rules in the European General Data Protection Regulation (GDPR) should be fully studied and absorbed.
He believes that at present, a problem facing my country is that when big data transactions were prevalent, many personal private data had been leaked, and many people did not even know that their data had been leaked or sold. Although it is possible to delete some information or change passwords and accounts, such operations are very complicated and time-consuming, and cannot effectively guarantee security.
Zhou Xiaochuan made a suggestion: “In this case, some risk control measures are needed to ensure data privacy and security, such as hierarchical limit management for accounts.”
How to bridge the data gap and “ensure the wide availability of digital RMB”
Wang Zhicheng pointed out at the 2020 Financial Development Summit Forum hosted by The Paper that the problems solved by digital renminbi and digital currency themselves are media problems.
“In China, only from the perspective of payment convenience, without the digital currency of the People’s Bank of China, the elderly who do not use electronic payment tools such as Alipay are excluded from the digital economy.” Wang Zhicheng said.
He actually pointed out the “digital divide” that has been hotly discussed recently.
In this regard, Mu Changchun emphasized “to ensure the wide availability of digital renminbi.”
He pointed out that in the issuance of digital renminbi, on the one hand, all commercial banks should also participate in circulation services. On the other hand, they should also ensure that all people, including poverty-stricken areas and digitally disadvantaged groups, provide inclusive services. , Easy-to-use digital central bank currency to avoid digital divide and financial exclusion.
“We have also been developing digital renminbi products suitable for the elderly and those who exclude the use of smart terminals.” Mu Changchun said.
Mu Changchun said that the issuance of digital renminbi is not achieved by administrative enforcement, but should be done in a market-oriented way. “We will issue as much as the ordinary people need to exchange. As long as the ordinary people need to use paper money, the People’s Bank of China will not stop the supply of paper money. I personally think that in the foreseeable future, digital renminbi and paper money will coexist for a long time. “
