Mobile payment network news: Recently, Fan Yifei, deputy governor of the central bank, stated at the 2021 China (Beijing) Digital Finance Forum that the digital renminbi is an important part of the financial supply-side structural reform, which is conducive to promoting the digital transformation of social life and production methods.
Regarding some urgent issues in the development of digital renminbi, he emphasized that in terms of rulemaking, it is necessary to take centralized management, unified recognition, and realize anti-counterfeiting as the prerequisites, and give full play to the advantages of digital renminbi settlement efficiency and strong privacy protection. According to the account management, it is not possible to copy the paper currency to request, the ones that should be broken must be broken, and the constraints must be restricted.
So which ones need to be constrained, and which ones should be broken?
The digital renminbi must be the renminbi
The digital renminbi is a digital legal currency issued by the central bank. It is operated by a designated operating agency. It is based on a broad account system and supports the loose coupling function of bank accounts. It is equivalent to the physical renminbi and has value characteristics and legal compensation.
The main implications are: First, the digital renminbi is the legal tender issued by the central bank. Second, the digital RMB adopts centralized management and two-tier operation. Third, digital renminbi is mainly positioned as a cash payment voucher (M0), and will coexist with physical renminbi for a long time. Fourth, the digital renminbi is a retail central bank digital currency, mainly used to meet the domestic retail payment needs. Fifth, in the future digital retail payment system, the digital renminbi and the electronic account funds of designated operating institutions are universal, and together constitute a cash payment tool.
For the digital renminbi, we must make it clear that the digital renminbi is still the renminbi, and it needs to comply with the management regulations and laws and regulations on the renminbi.
Therefore, as China’s legal tender, it must comply with the “People’s Bank of China Law”, “Renminbi Management Regulations” and other laws and regulations related to cash management. According to the renminbi’s legal indemnity provisions, digital renminbi is used to pay all public and private debts within the territory of our country, and no unit or individual may refuse to accept it if it meets the conditions for acceptance.
At the same time, the digital renminbi must also comply with laws and regulations on large-amount cash management, anti-money laundering, and anti-terrorist financing. For example, in accordance with the Central Bank’s “Notice on the Implementation of Large-Value Cash Management Pilots”, in order to cooperate with anti-money laundering work, large-value deposits and withdrawals should also be registered for digital renminbi in pilot areas, and relevant institutions should deal with large-value and suspicious transactions in digital renminbi. Report to the central bank.
In terms of business models outside the law, digital renminbi follows the existing “dual model” currency issuance system. The central bank is responsible for wholesale digital renminbi to designated commercial banks and full life cycle management, and commercial banks and other institutions are responsible for providing digital renminbi to the public. Exchange circulation service.
In addition, the central bank coordinates the management of digital renminbi wallets and quotas, so digital renminbi has unified business standards, technical specifications, security standards, and application standards. In addition, although each designated operating institution can realize its own digital renminbi wallet visual identification and characteristic functions, the wallet application has a unified cognitive system and anti-counterfeiting function.
Updates to laws and regulations under the digital renminbi
The digital renminbi has digital characteristics and is not fully applicable to the regulatory rules for the circulation of physical cash. It is necessary to formulate specific regulatory requirements for digital renminbi, build a digital renminbi circulation environment, and at the same time, as the digital renminbi issuance and circulation system gradually matures, timely improve corresponding laws and regulations .
The “Renminbi” in the “People’s Bank of China Law” clearly stipulates that the legal currency of the People’s Republic of China is Renminbi. No unit or individual may refuse to pay all public and private debts within the territory of the People’s Republic of China in Renminbi.
- Article 17 The unit of renminbi is yuan, and the unit of renminbi currency is jiao and cent.
- Article 18 Renminbi is uniformly printed and issued by the People’s Bank of China. When issuing a new version of RMB, the People’s Bank of China shall announce the time, denomination, design, style, and specifications of the issuance.
- Article 19 Forgery or alteration of Renminbi is prohibited. It is forbidden to sell or buy counterfeit or altered renminbi. It is forbidden to transport, hold, and use counterfeit or altered renminbi. It is forbidden to intentionally damage the renminbi. It is prohibited to illegally use RMB patterns in promotional materials, publications or other commodities.
- Article 20 No unit or individual may print or sell tokens and coupons to replace Renminbi in circulation in the market.
- Article 21 The damaged or defaced renminbi shall be exchanged in accordance with the regulations of the People’s Bank of China, and the People’s Bank of China shall be responsible for its recovery and destruction.
- Article 22 The People’s Bank of China shall establish a RMB issuance treasury and branch treasuries in its branches. The transfer of RMB issuance funds by the branch treasury shall be handled in accordance with the transfer order of the superior treasury. No unit or individual may use the issuance fund in violation of regulations.
On October 23, 2020, the Central Bank issued a public comment notice on the “Law of the People’s Republic of China on the People’s Bank of China (Revised Draft for Comment)”. The draft for comments has revised and updated the relevant content of the RMB, especially the digital form of RMB has been added. And the content of the digital token.
- Article 19 (Renminbi Unit) The unit of Renminbi is yuan, and the unit of Renminbi currency is jiao and cent. The renminbi includes physical form and digital form.
- Article 22 (Tokens) No unit or individual may make or sell tokens, coupons and digital tokens to replace RMB in circulation in the market.
Therefore, in accordance with the “People’s Bank of China Law”, the “Renminbi Management Regulations” formulated need to be updated or even supplemented. Because the formulation of the “Renminbi Management Regulations” is more on the basis of “cash”, it did not involve the management requirements of the “digital form” of the renminbi at that time.
The other “Interim Regulations on Cash Management” is also for the purpose of managing cash, encouraging bank account opening units to use cash in addition to the scope specified in this regulation, and to conduct transfer settlement through the account opening bank. The future development and application of digital renminbi will solve the management difficulties and concerns in this regard. Therefore, it is necessary to establish a separate “digital renminbi management method or regulation” on the basis of updating the original laws and regulations for scenarios other than physical cash. Make improvements and supplements.
What “cash” constraints need to be broken by the digital RMB
Following the traditional currency issuance system, the digital renminbi is not completely equivalent to “cash”, and some inherent constraints of cash need to be broken.
First, the digital renminbi needs to break the physical performance of “cash” in denominations and patterns. The digital renminbi adopts a generalized account system. There is no so-called currency manifestation. There is no need to consider the issue of change, and there is no problem of patterns and styles of different currency values. Therefore, the digital renminbi does not need to follow the design of cash denominations. However, as mentioned above, digital renminbi is mainly displayed and used through digital renminbi wallets. Therefore, wallet applications need to have a unified cognitive system and anti-counterfeiting functions. Each designated operating institution can realize their own digital renminbi wallet visual identification and special functions.
Second, the digital renminbi needs to break the completely anonymous nature of “cash”. Although there are large amounts of cash management, anti-money laundering, anti-terrorist financing and other laws and regulations for cash, the nature of cash is destined to its anonymity. The principle of “traceability”, on the one hand, pays attention to the protection of personal information and privacy, on the other hand, it can be traced back in accordance with the law for money laundering, terrorist financing and other illegal and criminal funds.
Third, the digital renminbi needs to break the traditional use of “cash”. Traditional cash transactions mostly exist offline, using the form of “paying with one hand and delivering with one hand”, but the digital renminbi is a digital form of legal tender, a product of the development of the times, and needs to conform to the characteristics of the development of the times. On the one hand, digital renminbi needs to meet various online and offline payment environments, and minimize usage barriers due to factors such as technical literacy and communication network coverage; on the other hand, digital renminbi needs to have the characteristics of electronic advancement to meet the different needs of the digital age The payment usage requirements in the scenario.
Among them, the programmability of the digital renminbi is one of the characteristics of its digital form of technological progress. The digital renminbi realizes programmability by loading smart contracts that do not affect currency functions, so that the digital renminbi can ensure safety and compliance under the premise of ensuring safety and compliance. Automatic payment transactions can be carried out according to the conditions and rules agreed by both parties to the transaction to promote business model innovation. However, the current programmability of the digital RMB is only reflected through “smart contracts”. Whether there are other functions and innovations to achieve programmability in the future requires industry research and industry exploration.
In short, the online payment environment is a battlefield where digital renminbi is different from cash. Its expandable functional scenarios and business space are very huge. Under the extremely developed and perfect environment of domestic mobile payment, how to achieve convenience while ensuring the legality of digital renminbi , Smooth and efficient online payment experience is worth thinking and exploring. And this is the fundamental reason why the digital renminbi needs to be broken.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/what-does-the-digital-renminbi-need-to-restrict-what-to-break/
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