Digital RMB issuance will be a solid foundation for the development of China’s digital economy as it greatly reduces costs in the areas of printing, circulation and transactions compared to paper money, and improves the efficiency of the entire society.
Beijing has just issued another 200,000 digital RMB red envelopes, and the lucky recipients can experience digital RMB payments within apps like Jingdong and Drip. In the past six months, as more and more areas are piloting digital RMB, the use of scenarios are getting richer and richer, from only one or two banks piloting digital RMB to now the four major banks of industry, agriculture, construction and China, and Alipay WeChat are all going to access digital RMB, everything indicates that the full implementation of digital RMB is getting closer and closer.
For this new thing that is going to replace cash as a must-use in China, there are still many people who have questions, such as “Is digital RMB related to WeChat Alipay? The new digital yuan will soon replace cash in China. The new digital renminbi will soon replace cash in China. The newest version of BlockBeats is the newest version of BlockBeats.
BlockBeats has also experienced the digital RMB wallet internally, and this article is about the digital RMB, answering the 10 questions you care most. I believe that after reading this article, you will have a relatively comprehensive understanding of digital RMB.
(Note: Because the Digital RMB is not fully operational and is still in the pilot stage, each tester will need to abide by a confidentiality agreement, so there are no detailed pictures of the interface below.
- What is the Digital RMB?
Digital RMB is a digital form of legal tender issued by the People’s Bank of China.
Note these 3 keywords, “People’s Bank of China”, “digital form”, “legal tender”. Why do we need to emphasize these three keywords? Because the banknotes we spend in our lives and the RMB we have in our bank cards are legal tender issued by the People’s Bank of China. The only difference between RMB and digital RMB in definition is the “digital form”.
Therefore, we only need to remember that “digital RMB” is “RMB”, which is “money”, and we can basically understand it.
It’s just that the form of money has changed from the “banknote RMB” that people used to pay for things, the “bank deposit” that they swiped their cards, and the “Alipay balance” that they swiped their codes, to the “digital RMB” that is “digital form”. The place where you put paper money is called wallet, and the place where you put digital RMB is called digital RMB wallet, which is installed in your cell phone in the form of “digital RMB APP”.
Since it is legal tender, it can be circulated like paper money, and no one can refuse to accept digital RMB after it is fully promoted. Moreover, digital RMB issuance will be a solid foundation for the development of China’s digital economy as it greatly reduces costs in the areas of printing, circulation and transactions compared to paper money, and enhances the efficiency of the whole society.
In other words, the first major feature of digital RMB – legal tender.
- Will the exchange of digital RMB lead to inflation?
No, because no new money is printed out.
The second feature of digital RMB is that it is equivalent to RMB. 100 RMB bills are worth as much as 100 digital RMB.
At this stage, the digital RMB is exchanged with bank card deposits, and for every dollar of digital RMB exchanged, the bank has to pay a reserve of one yuan to the central bank, which is 100% of the reserve.
There is no money printed in the process of exchanging digital RMB, and we can always exchange digital RMB back to RMB, so there will be no inflation due to the exchange of digital RMB.
- Can the digital RMB actually protect privacy?
This brings us to the third major feature of digital RMB: anonymous offline transactions.
When we use paper money, we are actually transacting anonymously offline. For example, you and the kiosk owner, you don’t know each other, but you shell out two $1 bills to buy ice cream, which is called anonymous transaction. You don’t need others or the system to confirm the action of buying ice-cream, you confirm with the boss 2 yuan a ice-cream, one hand to pay the money on the other hand, this is called offline transactions.
Nowadays, when you pay with payment software or bank card, all the information about the transaction object, location, amount and so on will be transmitted to their headquarters online, turning into a real-name network transaction, and the payment software will record your data, and they will use your financial information to analyze and recommend products.
The digital RMB solves this problem. When using the digital RMB, whether you buy something online or scan a code offline, the information of the person paying is encrypted and then pushed to the merchant, and both sides of the transaction are anonymized through technology and systems, which protects privacy very well. And what’s even better is that, in media reports, the digital RMB can be traded offline in places where both parties have no internet or signal to rely on the “NFC touch” function of the digital RMB for payment, i.e., double offline transactions.
This leads to a new question: if phone A logs in and opens airplane mode, and phone B logs in and opens airplane mode again, can the money be spent offline twice without internet access?
In the test, the payee is offline at the same time, the transaction is not successful, the payee is offline, the payer is online, the transaction is feasible, the payer is offline, the payee is online, which means that at this stage, the person who spends the money must be online to broadcast the transaction. It is expected that both sides of the transaction going offline may only be open to certified merchants and special devices.
Also, for security reasons, digital RMB is not completely anonymous, but controlled anonymous. When it comes to combating money laundering, terrorist financing, tax evasion and other illegal and criminal acts, the transaction information is open to the relevant authorities; and if large amounts are to be paid, relevant information will need to be provided for traceability.
- How to use Digital RMB?
Digital RMB wallet use cell phone number to register and login, add digital RMB wallet, you can see that the four major banks, Bank of Communications, Postal Savings Bank, etc. are supported. These banks only provide the service, you don’t need to have their bank cards to register for the digital RMB wallet, on the one hand to protect privacy, on the other hand to lower the threshold of use, so that the elderly and children can use it. After registration, you will see this interface, slide up and down to pay and receive, and if both phones have nfc, you can also touch to pay, and the normal payment and receipt is very fast.
So how can I have digital RMB?
1, charge money, only charge money to become powerful, need real name authentication and then use bank card to recharge.
2, get money, let each other or other people directly use the payment function to transfer money to you, beautiful.
With the money, in addition to offline face-to-face payment, you can also pay online. You abstract your thinking a bit more, a big virtual wallet can be split into multiple sub-wallets, the sub-wallets are pushed through the Digital RMB APP to connect to other APPs we use everyday, and then you will see such options when you pay, after which you can pay and use it. For example, I can push this sub-wallet of digital RMB wallet to B station APP, and when B station APP is topping up B coins, hey, you can directly deduct the money from digital RMB wallet, and then you can charge your favorite up owner.
Another example is that you can connect to Jingdong for shopping, Jingdong used to need to let me tie my card, jump to WeChat payment and so on, but now you can go directly to the digital RMB payment, Jingdong only knows that I paid the money, but nothing else. And in the future, you can also avoid the payment monopoly that Taobao can’t use WeChat and WeChat can’t use Alipay, because digital RMB is legal tender and the platform must accept it.
- Digital RMB can be paid without internet connection, what if it is stolen?
Here comes the fourth major feature of digital RMB: high security performance.
In the past, the banknotes were lost and could not be found, but now with digital RMB, if your phone is broken or lost, you can lose and recover your digital RMB account, and the money will not be lost. The actual fact is that you can’t get a lot of information about your own personal computer or even your own personal computer.
There is no need to worry about theft either.
The financial sector and telecom operators hold part of the data respectively, and once such crimes like theft occur, judicial and law enforcement authorities will catch the bad guys according to the map. And Mu Changchun, director of the People’s Bank of China’s Digital Currency Research Institute, has said that if a digital RMB telecom fraud occurs, the money can be recovered to protect property security.
- Why don’t digital wallets give interest?
Digital RMB is money, and a digital RMB account is a virtual wallet. Imagine you stuff bills and coins into your wallet, will it rise interest on its own? That’s definitely not going to bubble up with interest. So a digital RMB account, you need to imagine it abstractly as a wallet that exists in digital space, stuffing money into the wallet and not saving it as a current or financial product, so naturally there will be no interest.
However, it is conceivable to push the sub-wallet to the financial APP in the future, and the digital RMB will be processed for wealth management, which can also achieve the similar wealth management functions of BalancePay and WeChat Zero Money.
7、Will digital RMB kill Alipay and WeChat Pay?
They are not the same thing, there is no such thing as killing them, but it may change the mobile payment pattern.
As I said earlier, digital RMB is money, “money” itself, while WeChat Pay, Alipay Pay, is a way to receive money or pay. We buy ice-cream again, this ice-cream, 2 yuan, you can choose to pull out bills or coins, or WeChat Pay Alipay sweep code payment, or now digital RMB touch payment, the process, you transfer 2 yuan worth of RMB through the hand, payment software, digital RMB to the boss, the boss received the money, gave you ice-cream.
All changes are the same, no matter what method you use, you are handing the money to the other party, only the way, the path of communication has changed. The emergence of Alipay and WeChat payment makes the payment process easier and faster, there is no fake money, so it quickly became popular. They definitely have to charge for providing this service, the cost is that you give them your privacy and information, have to see a lot of ads, there is a fee when the funds are withdrawn and transferred out, and some merchants have a fee for receiving money. You should not have heard of a fee for buying ice-cream with a banknote.
As a non-refusable legal tender, the digital renminbi wallet’s sub-wallets will likely be connected to all the apps that require payments, so it’s also likely to disrupt the current mobile payment landscape – after all, you can now choose a more secure, non-private digital renminbi option when you pay.
The current monopoly of 94% of China’s mobile payments market, which is dominated by Alipay and WeChat Pay, could be broken. Look carefully, the past few pilots were arranged to engage on Jingdong.
- Can people who can’t use cell phones use digital RMB?
The digital RMB is not mandatory, it is a supplementary form of paper banknotes.
You can use paper money if you want to, but you can use digital RMB if you want to, and you can use WeChat Pay Alipay as usual.
Of course in order to get everyone into the digital RMB era as soon as possible, there have been many products for the elderly, such as this
This is the digital RMB hardware wallet of the postal savings pilot, in the future you can give the elderly a card like this, deposit some money into the wallet, set the number of times it can be used offline, after the grandparents go out only need to take this hardware wallet to touch, you can complete the digital RMB payment, is not also quite convenient? And because of the controlled anonymous security, there is no need to worry about the elderly being cheated.
- Can I dig up digital RMB?
Digital RMB is legal tender, it can only be obtained by topping up or transferring money, it cannot be mined!
Many people are concerned about the relationship between digital RMB and digital currencies like bitcoin and ethereum. Digital RMB and Bitcoin are not the same kind of thing.
The digital RMB issued by the People’s Bank of China is a legal tender backed by government credit, while cryptocurrencies like Bitcoin are decentralized virtual assets that are valued at consensus value. The digital RMB has a 1:1 value parity with the RMB.
- Can the digital RMB become an international currency?
Regarding whether the digital RMB can be internationalized, experts from the central bank also said in April that they have already started exploring cross-border payment applications for the digital RMB. Currently, the launch of China’s central bank digital currency is far faster than all other countries, and while the US and Europe are still discussing whether to do it, we have already tested it on a large scale.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/10-things-you-need-to-know-before-digital-rmb-becomes-popular/
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