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.
With the advancement of research and development and pilot projects, the digital renminbi is moving from pavilions in the sky to the daily life.
What can the future digital renminbi look like? Where can it be used? how to use?
Payment for meals, parking for gas, transportation, recharging phone bills, online shopping…Digital RMB may appear in every use scene in life.
Pilot projects in four cities
On April 19, 2020, the relevant person in charge of the Digital Currency Research Institute of the People’s Bank of China stated that the research and development of digital renminbi is progressing steadily, and internal closed pilot tests will be carried out in Shenzhen, Suzhou, Xiongan New Area, Chengdu and future Winter Olympic scenes.
Judging from the current pilot situation, the closed test content of the four pilot cities is mainly concentrated in small, retail, and high-frequency business scenarios.
Among them, the scenarios that Suzhou has tested include: smart parking, transportation subsidy distribution, smart business district construction, tax payment, online payment and other application scenarios.
Shenzhen expanded its consumer merchants to gas stations. On October 13, the Guangdong Petroleum Branch of Sinopec launched a pilot digital RMB payment application at 11 gas stations in Shenzhen, which will further expand to more than 110 self-operated gas stations in Shenzhen.
In Xiong’an New District, Hebei, a pilot promotion meeting for legal digital RMB was held in Xiong’an New District on April 22. Including digital currency research and development institutions and pilot merchants are invited to participate. On September 27, Xiong’an Customs, a subsidiary of Shijiazhuang Customs, completed the first payment of risk deposits in digital currency.
According to a bank employee in Chengdu, the paper revealed to The Paper that at present, Chengdu uses a whitelist invitation system to download digital renminbi wallets through the invitation of employees of large state-owned banks, and can be used in offline stores such as Hongqi Supermarket. He also said that Chengdu has carried out several charging activities, and users can freely transfer money into digital renminbi in their wallets, and only need to spend 0.01 yuan digital renminbi to charge 20 yuan.
In October and December, digital renminbi consumption red envelope events held in Shenzhen and Suzhou pushed the digital renminbi test to “semi-open”.
Expect to test more scenarios in more cities
Cross-border payment is also a key application scenario for digital RMB. On December 4, Yu Weiwen, President of the Hong Kong Monetary Authority, mentioned in the article “New Trends in Financial Technology-Cross-border Payments” that the Hong Kong Monetary Authority is working with the Central Bank Digital Currency Research Institute to study the use of digital renminbi for cross-border payment technology testing, and Make corresponding technical preparations.
On December 7, the media quoted a Hong Kong Monetary Authority’s spokesperson as reporting that “the relevant technical tests are limited to Hong Kong banks designated by the People’s Bank of China (Bank of China (Hong Kong)) and bank employees (about 200) who are invited to participate in the test. And merchants participated in making technical preparations for using digital renminbi for cross-border consumption.”
Hainan, Hebei’s Xiong’an New District, and Chongqing have also put forward the goal of exploring the application of digital renminbi in cross-border payments.
On August 22, Shen Danyang, Vice Governor of Hainan Province, also mentioned at the “2020 Golden Bull Asset Management Forum” that Hainan will actively strive for the application of legal digital currency pilots in the cross-border trade of Hainan Free Trade Port.
On August 26, the General Office of the People’s Government of Hebei Province issued the “Notice on Printing and Distributing the Implementation Plan for the Construction of China (Xiongan New Area) Comprehensive Pilot Zone for Cross-border E-commerce”, showing that Xiongan New Area encourages the use of RMB in cross-border e-commerce activities. Settlement, explore cross-border payment in digital currency.
On November 24, at the China-Singapore Financial Summit “China-ASEAN Financial Cooperation and RMB Internationalization” forum, Chongqing Deputy Mayor Li Bo said that Chongqing will actively strive to carry out digital trade and digital currency cross-border payment pilots, and explore The way of digital currency facilitates the cross-border use of RMB.
It is worth noting that Shen Danyang, Vice Governor of Hainan Province, also mentioned the application of digital renminbi in cross-border investment and financing and penetrating supervision at the “2020 Golden Bull Asset Management Forum”.
Digital renminbi red envelopes became popular: the test went from semi-closed to semi-open
This year’s two digital renminbi red envelope tests have made the digital renminbi move from closed to semi-open, and it has also made more people aware of the digital renminbi.
On October 9, Shenzhen launched the first digital RMB red envelope pilot activity.
Zou Chuanwei, chief economist of Wanxiang Blockchain and PlatOn, previously told The Paper that the significance of Shenzhen’s pilot RMB red envelope is: first, testing the installation of digital RMB wallet App, digital RMB directional transfer, digital RMB payment (including consumption The two links of payment and merchant collection), digital renminbi recharge and digital renminbi wallet binding bank card and other core links. Second, attracting people to participate by drawing lots is a good public education activity about digital RMB. An industry insider mentioned to The Paper that the Shenzhen pilot has tested consumers’ acceptance of digital renminbi, and targeted the promotion and use of digital renminbi to perfect and improve. He also said that this pilot is a stress test to see if 50,000 users are spending digital renminbi in a relatively closed scenario, and whether the system has any security risks.
On December 4, Suzhou also started the digital RMB red envelope pilot activity for the “Double 12 Suzhou Shopping Festival”, and the red envelope test was further upgraded.
In terms of quantity, amount, and duration, Shenzhen issued digital RMB red envelopes totaling 10 million yuan, each with an amount of 200 yuan, and the total number is 50,000. The effective use time is more than 6 days. The amount of digital RMB red envelopes in Suzhou is also 200 yuan, but the total number of red envelopes is 100,000, with a total amount of 20 million yuan issued, which is twice that of Shenzhen, and the effective time is more than 16 days, which is nearly three times that of Shenzhen.
In terms of appointment conditions, Suzhou’s application conditions are more stringent. Shenzhen only needs to “apply for individuals in Shenzhen”, while Suzhou needs to have one (or more) normal social security payment records within the Suzhou city in the past three years (monthly), and the household registration or temporary residence is within the Suzhou city .
The designated operating institutions for the digital RMB red envelope activity in Suzhou are based on the four major banks of China Construction Industry and Agriculture, including Bank of Communications and Postal Savings Bank. 6 designated operating institutions have opened different types of digital RMB wallets, JD Digital, Huawei, vivo, etc Commercial enterprises are also joining them.
For example, citizens can spend without threshold at nearly 10,000 offline merchants in Suzhou City. Five-star appliances under JD, JD Home, JD Convenience Store and other offline scenarios all support the use of digital renminbi.
In the scope of use, Suzhou has also achieved capacity expansion. On the one hand, compared to Shenzhen, which can only be used in 3389 merchants in Luohu District, the use of digital RMB red packets in Suzhou covers the whole city, with nearly 10,000 merchants available. On the other hand, the usage scenarios in Suzhou are also covered from offline to online. JD.com supports citizens using digital renminbi to pay when purchasing self-operated products. Citizens whose delivery address is in Xiangcheng District can choose to pay for self-operated products on JD.com. The scene uses digital RMB payment.
In addition, in Shenzhen, the “offline” function is not yet available in the digital RMB red envelope pilot, and only some merchants can use the touch function. In the digital RMB red envelope test in Suzhou, consumers have the opportunity to participate in the offline wallet experience. The scope of the scene is also expanding.
Digital RMB wallet: scan, touch, and push sub-wallets
“The core node of the operation of digital renminbi is the unified APP of the central bank.” Wang Yongli, former deputy governor of Bank of China and chief economist of Shenzhen Neptunus Group, in the article “Experience is similar to Alipay WeChat payment, where is the real innovation and change of digital renminbi” Pointed out.
Although in the pilot, the intuitive feelings of consumers and merchants are basically “similar to Alipay and WeChat Pay.” Wang Yongli pointed out that one of the major changes is that the digital renminbi needs to download the unified APP of the central bank, rather than the independent APP of each exchange operator and payment and settlement service operator. All operating service providers also need to download the central bank’s unified APP. The “digital renminbi wallet” opened for users is just a supporting facility that connects with the central bank’s “digital renminbi APP”.
He believes that this will bring about major changes in the digital renminbi payment operation system and mechanism: the central bank has become the core entrance and clearing center for the operation of digital renminbi.
It is understood that from the perspective of downloading the APP, the digital renminbi wallet is the only and unified APP. Choosing a different bank is only to choose the service bank, and where to put the entry is the independent choice of the local government.
“Su Zhou Da” APP, Chengdu has “Panda Wallet”, users can download digital RMB in the APP promoted by the local government.
According to the latest digital renminbi wallet interface in the Suzhou pilot, you can open the wallet to slide up and down to collect payments. There are three functions: scan, QR code, and touch on the collection and payment interfaces.
Compared with the digital renminbi wallet in the Shenzhen pilot, the wallet interface of the Suzhou pilot places all six state-owned banks in it, and consumers can choose any one or more banks. And consumers can choose whether to push digital wallet sub-wallets to merchants for convenient and confidential payment at merchants.
A Shenzhen digital RMB red envelope winner told The Paper that he hopes that the digital RMB can be bound to hardware without the need for an App. “If you use the digital RMB App alone, there may be no incentive unless there is always a subsidy. But once the subsidy It needs to be delegated from the central bank level. In fact, it is equivalent to a shopping coupon, and more issued will also affect market prices.”
In response, Li Feng, a professor at the Shanghai Advanced Institute of Finance and deputy dean of the China Financial Research Institute, said: “The issuance of digital renminbi conforms to the trend of currency digitization, forming a unified national credit-based digital currency at the central bank level, and safeguarding currency sovereignty and The status of legal currency allows the central bank to monitor currency circulation information and delivery areas throughout the process, improve the efficiency of the currency circulation market, and reduce the lag of monetary policy transmission. Therefore, an independent App must be responsible for operation.”
Zou Chuanwei also pointed out that digital renminbi wallets can only be provided by commercial banks that are designated operating institutions. According to Article 9 of the “Administrative Measures for Online Payment Services by Non-bank Payment Institutions”, non-bank payment institutions shall not operate or operate currency exchange in a disguised form, and do not have the institutional basis for providing exchange services for the digital RMB positioned by M0. Therefore, “Alipay, WeChat, etc.” Digital renminbi wallets cannot be operated, and digital renminbi wallet apps cannot be tied to Alipay, WeChat, etc.”
“If you pay through banks, Alipay, WeChat App, it will involve data governance issues. Who gets the data first in the payment transaction process?” said Chen Wen, director of the Digital Economy Research Center of the School of Finance, Southwestern University of Finance and Economics.
Four payment scenarios for zero distance experience
In the latest Suzhou digital RMB red envelope pilot, there are four payment scenarios: offline payment, offline payment, online payment, and cash on delivery, which basically cover the scenarios that people may encounter on a daily basis.
Based on the positioning of digital cash, the “dual offline payment” function of digital renminbi has always attracted attention, and both parties can complete transactions without internet.
According to the description of Suzhou experiencer Ms. Wu, she first switched her mobile phone to airplane mode, opened the digital people’s wallet and swiped to pay, chose the one-touch payment method, and first tapped the setting interface to turn on NFC (Near Field Communication Technology). At the same time, merchants also opened personal digital renminbi wallets in flight mode, and chose to touch and set the payment amount when receiving payments. Touch the two mobile phones close together to complete the payment randomly.
“When I encountered it, I felt that the payment was successful in one to two seconds,” Ms. Wu said. “Offline payment is still very good. Sometimes we will encounter some bad signals or unstable conditions. It can completely solve the shortcomings of our inability to pay.”
However, offline payment currently only supports mobile phones such as Huawei and VIVO with hardware wallets installed, and mobile phones need to use NFC technology.
For ordinary offline payments, The Paper reporters visited and found that the general payment methods are QR code scan (merchants scan the customer’s payment code) and scanned (customers scan the merchant’s QR code) and touch.
Among them, the main scanning equipment of the QR code includes a POS machine or a code scanning gun, and the scanned equipment includes a POS machine and a small standing card with a two-dimensional code. The small standing card also has a “touch sensing area”.
According to a store manager, a “chip” is installed in the sensing area. Merchants participating in the pilot will set up a small stand, whether there are POS machines and code scanners is different.
One-touch payment also requires the mobile phone to have NFC technology. The specific operation method is similar to the offline payment experience process, except that you need to touch the “touch-sensing area” on the small stand with your mobile phone, and consumer phones do not need to be equipped with hardware wallets. .
In online payment, consumers need to create a sub-wallet in the digital renminbi wallet, choose to push the sub-wallet to the JD APP, then open the JD APP, select self-operated products, submit the order, and select “Digital RMB” in the payment options to complete the payment .
In addition, citizens whose delivery address is in Xiangcheng District can choose to use digital renminbi for payment in the cash on delivery scenario of self-operated goods on JD. A JD express brother told The Paper that the mobile phone he uses is called an industrial all-in-one. Scanning the item number will display the order information. Now the digital payment option appears at the bottom of the order information interface. Once clicked, the specific payment will appear. With code interface, customers can pay by scanning the code with their digital RMB wallet.
He said that using digital renminbi to receive payments is faster than the previous cash on delivery payment. Previously, you had to click on the customer order interface (the order is completed), then sign the receipt, select the payment method, and finally click Finish. Now you can click Digital payment can save two steps in the middle.
