The scale of the digital renminbi pilot program has been expanded in an orderly manner, opening up a new payment experience
The People’s Bank of China recently held a work conference for the second half of 2021. When talking about deepening financial reforms in key areas, the conference proposed to steadily advance the digital RMB research and development pilot. Prior to this, the People’s Bank of China Digital RMB Research and Development Working Group released a white paper on the research and development progress of China’s digital RMB. Nowadays, digital RMB pilot projects have been launched in many places, and the application scenarios have been continuously enriched, which has actively promoted the scale expansion and quality improvement of China’s digital economy.
Orderly expansion of pilot scale
At the end of 2019, digital renminbi pilot tests were launched in Shenzhen, Suzhou, Xiong’an New District, Chengdu and other places. In October last year, pilot test areas such as Shanghai, Hainan, Changsha, Xi’an, Qingdao, and Dalian were added. Currently, the scale of digital RMB pilot testing is expanding in an orderly manner.
Recently, at a media briefing on the white paper on China’s digital renminbi R&D progress, Fan Yifei, vice governor of the People’s Bank of China, introduced the latest achievements of the digital renminbi pilot, saying: “As of June 30, the number of invited whitelisted users for the digital renminbi pilot has exceeded 10 million, 20.87 million personal wallets and 3.51 million public wallets were opened, and the total number of transactions was 70.75 million with an amount of 34.5 billion yuan.”
The application areas of digital renminbi are gradually expanding. At present, there are more than 1.32 million digital RMB pilot scenarios, both online and offline, covering areas such as wholesale and retail, catering, cultural and tourism, education and medical care, public transportation, government payment, tax collection, and subsidies.
Participating institutions have also combined the actual conditions of the pilot areas to create distinctive and bright application fields, and initially formed a batch of replicable and extendable digital renminbi application scenarios. For example, in April this year, Yongxing Island in Sansha City, Hainan Province proposed to build Yongxing Island into a “digital RMB consumption island” through full coverage of consumption scenarios such as supermarkets, hotels, and government canteens. In May, the digital renminbi was used for the first time in cross-border import e-commerce payment scenarios, used and paid by cross-border import e-commerce companies in Hainan Province.
The digital renminbi will also be used in the 2022 Beijing Winter Olympics. According to Fan Yifei, the digital RMB Beijing Winter Olympics scenario pilot program mainly focuses on payment service needs in the seven key areas of Beijing Winter Olympics: food, housing, transportation, travel, shopping, entertainment, and medicine. In the Winter Olympics, innovative application scenarios such as unmanned vending machines, self-service vending machines, and unmanned supermarkets will be deployed on a trial basis, and wearable payment devices such as payment gloves, payment badges, and Winter Olympics payment clothing will be launched.
Improve the security of the payment system
In the eyes of many consumers who have tried digital renminbi, they can also use their mobile phones to make payments to merchants. The use of digital renminbi does not seem to be much different from electronic payment tools such as WeChat Pay and Alipay. But in fact, there are essential differences between the two.
According to the “People’s Bank of China Law” revised draft (draft for comments), “Renminbi includes physical form and digital form.” From the perspective of economic value, the digital renminbi is equivalent to the physical renminbi. Mu Changchun, director of the Digital Currency Research Institute of the People’s Bank of China, pointed out that WeChat Pay and Alipay are equivalent to “wallets”, while digital renminbi is the “money” inside, and they are not in the same dimension.
“Digital renminbi will provide the public with a new universal payment method that can increase the diversity of payment tools and help improve the efficiency and security of the payment system. Digital renminbi is mainly based on the positioning of cash-based payment vouchers and is mainly used for retail payments to improve The purpose of financial inclusion is to learn from electronic payment technology and experience and form a useful supplement to it.” Mu Changchun said.
Mu Changchun also pointed out that the digital renminbi has specific advantages. One is that the digital renminbi is the country’s legal tender, and it is the asset with the highest security level. The second is that digital renminbi can transfer value without relying on bank accounts, and supports offline transactions, with the feature of “payment as settlement”. Third, the digital renminbi supports controllable anonymity, which is conducive to protecting personal privacy and user information security.
Avoid the digital divide
Industry insiders pointed out that the design of digital renminbi needs to fully consider convenience, safety, inclusiveness, etc., especially China, as a large developing country with a vast territory and a large population, social environment and residents’ payment habits, age structure, and security needs, etc. Factors determine that the physical renminbi has the irreplaceable characteristics of other payment methods. Therefore, in the foreseeable future, the physical renminbi and the digital renminbi will coexist for a long time.
Judging from the current landing scenarios of digital renminbi, digital renminbi wallets basically appear in the form of apps, and they also support offline payments. According to Luo Rui, director of the People’s Bank of China’s Currency, Gold and Silver Bureau, the digital RMB wallet is designed to facilitate online and offline full-scenario applications to meet the differentiated needs of users with multiple subjects, multiple levels, multiple categories, and multiple forms, and avoid the “digital divide”. Come use obstacles. Among them, hard wallets implement digital renminbi-related functions based on technologies such as security chips, and rely on IC cards, wearable devices, and Internet of Things devices to provide services to users, helping to solve the problem of inconvenience in operating smart phones for specific groups such as the elderly and the disabled.
“In the design of future digital RMB products, the actual needs of specific groups will be fully considered, and the difficulty of use will be reduced through a variety of technical means. In the next step, the People’s Bank of China will conduct in-depth investigations into the public’s demand for digital RMB services and further enhance the digital RMB. Inclusiveness.” Luo Rui said.
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