Patent analysis: methods, devices, equipment and storage media for issuing digital currency loans

News from the mobile payment network: With the gradual deepening of the digital renminbi pilot, more and more companies have begun to join the pilot, and patent applications related to “digital currency” are constantly updated.

In the last article, we have a comprehensive understanding of the layout of patents related to “digital currency” from last year to the present, and analyzed the technical direction of the Central Bank Digital Currency Research Institute from the patent direction. In the next few articles, we will start from a certain patent or a certain technical perspective. Let’s take a look at the layout of relevant institutions in terms of digital currency.

Method, device, equipment and storage medium for issuing digital currency loan

In the domestic currency hierarchy, M0 = cash in circulation, M1 = M0 + demand deposits of non-financial companies (ie demand deposits in banks by enterprises, institutions, organizations, troops, schools, etc.), M2 = M1 + non-financial Fixed deposits + savings deposits + other deposits of sex companies. In other words, M1 usually refers to M0 + tradable deposits, while M2 usually refers to M1 + non-trading deposits.

As we all know, the positioning of the digital renminbi is M0, which is equivalent to cash and does not count interest. While credit is usually directly related to non-transactional deposits of banks, the country can actually control the growth of credit through monetary instruments. The non-trading deposits in M2 are largely used by banks for lending.

So, how can the digital renminbi as M0 establish a connection with bank loans?

As one of the central bank institutions, Hangzhou Blockchain Technology Research Institute of China Note Credit Card Industry Development Co., Ltd. (hereinafter referred to as China Note Blockchain Technology Research Institute) applied for a method called “Digital Currency Loan Issuance” in 2020. , Devices, equipment and storage media” patents, officially announced in March 2021.

The patent abstract indicates that the embodiments of this application provide a method, device, equipment, and storage medium for issuing a digital currency loan. The method for issuing a digital currency loan includes: sending user information to the terminal of the user qualification review department for user qualification The audit department terminal generates user qualification certification information when the user information meets the user qualification review standard information; receives the user qualification certification information; sends the user qualification certification information to the digital currency operating agency terminal for use in the digital currency operating agency terminal to prove the user qualification When the information indicates that the user information meets the lending standard information, the user information is bound to the legal digital currency available to the designated merchant; this embodiment of the application can solve the problem of the difficulty in realizing the limitation of the use of funds for fixed-use loans in the prior art.

How to understand it in detail?

Keywords: fixed-purpose loans

The issuance of digital currency loans mentioned in this patent is not what we usually call consumer loans. It is aimed at fixed-use loans for special groups, so it is still quite different from ordinary loans.

Fixed-purpose loans refer to a form of public welfare loans opened by financial institutions to special groups, such as poor households, students, and entrepreneurs. Among them, poverty alleviation loans are a loan business undertaken by financial institutions related to the government. There are two main forms, one is loans to poor households, and the other is poverty alleviation loans to leading enterprises and infrastructure construction. The amount is normally within 50,000 yuan, and the term is within three years. There is no need for guarantees and collateral. The interest rate refers to the basic interest rate of the National Central Bank, financial discounts and government subsidized credit loans at or above the county level.

According to the policy, poverty alleviation microfinance must insist on household borrowing, household use, and household return, and it shall be used precisely for poor households to develop production and business operations. It shall not be used for non-productive expenditures such as marriage, house construction, financial management, and purchase of household goods. Therefore, it is necessary to understand where poor households have used their funds after applying for poverty alleviation loans. It would be better if the use of funds can be restricted. However, most of the current post-tracking of the use of funds is conducted by personnel to conduct on-site investigations, and there is no systematic method to achieve the use of funds for fixed-purpose loans.

The patent specifically provides a method for issuing digital currency loans, which can solve the problem that it is difficult to realize the limitation of the use of fixed-use loans in the prior art. When a user applies for a loan, the user information is first sent to the terminal of the user qualification review department, which is used by the terminal of the user qualification review department to generate user qualification certification information when the user information meets the qualification review standard information, and then send the user qualification certification to the digital currency The operating agency terminal binds the legal digital currency available to the designated merchant to the user information when the user qualification certification information indicates that the user information meets the lending standard information.

Patent analysis: methods, devices, equipment and storage media for issuing digital currency loans

The availability of designated merchants perfectly limits the fixed use of loans. Operating agencies can generate records of users’ consumption of legal digital currency for post-mortem evaluation of loan usage. The legal digital currency has the feature of payment and settlement, which will be credited to the account in real time after the payment is completed. Merchants can receive payments without waiting for the billing period, shortening the funding cycle, and making it easier for merchants to receive.

Are smart contracts used?

At present, digital renminbi is undergoing pilot tests in “10+1” cities and regions. As of June 30, 2021, there have been more than 1.32 million digital renminbi pilot scenarios, covering life payment, catering services, transportation, shopping and consumption, and government services. And so on in various fields.

The patent has a certain value in the promotion of digital renminbi scenarios and can provide ideas for the application of digital renminbi in the credit field. After all, there are no credit-related applications in the many scenarios where the digital renminbi pilot is implemented. 

However, for the application of digital renminbi in fixed scenarios and at a fixed time, it seems to reflect another characteristic of digital renminbi, that is, “programmability.”

Previously, the Central Bank released the “White Paper on China’s Digital RMB R&D Progress”, which introduced that the digital RMB realizes programmability by loading smart contracts that do not affect currency functions, so that the digital RMB can be based on the conditions agreed by both parties to the transaction under the premise of ensuring safety and compliance. , Rules for automatic payment transactions, and promote business model innovation. 

In other words, by loading smart contracts in the future, the flexibility of digital renminbi can be applied to a variety of environments and relationships, such as targeted use, targeted crowds, targeted scenarios, and so on.

So the fixed-use loans for special groups mentioned in the patent, the operating agency binds user information to the legal digital currency available to the designated merchant when issuing legal digital currency loans, is there any use of “smart contract” technology? There is currently no answer to this question, because the application of “smart contract” technology is not mentioned in the description of the patent description. Perhaps the legal digital currency issued by the designated merchant under a single condition does not require the application of smart contracts, or it may be used in the future. Smart contract technology is added for more flexible scenarios.

Concluding remarks

The China Banknote Blockchain Technology Research Institute is a scientific research institution of the China Banknote Printing and Minting Corporation (directly under the Central Bank). It is one of the earliest teams in the domestic financial field to study blockchain technology. Continue to conduct in-depth research, explore the research of core technology related to legal digital currency, and the construction of RMB digitalization.

It has successively undertaken the Central Bank’s “Digital Bill Trading Platform Based on Blockchain Technology”, the “Cross-border Financial Blockchain Service Platform” of the State Administration of Foreign Exchange, and the China Securities Regulatory Commission’s Blockchain Regional Stock Exchange Pilot Project “Zhejiang Stock Exchange”. “Chain Project” and many other key projects. Among them, the digital bill trading platform prototype system is the central bank’s first global trading platform to study the issuance of digital currency and carry out real applications, and is the first to explore the practical application of blockchain technology in currency issuance.

Although the number of patent applications related to “digital currency” by the China Banknote Blockchain Technology Research Institute has gradually decreased since last year, the current blockchain technology is booming, and the Central Bank Digital Currency Research Institute is also actively exploring the possibilities in this regard. In the future, the possibility of combining the two in some aspects is still relatively large.

 

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