What is the scale of digital renminbi issuance? How long will the cash be around? Authoritative response is coming
Use digital renminbi consumer coupons, spend digital renminbi to ride a shared bicycle…Digital renminbi is gradually integrating into people’s lives. However, many people still have some doubts about this new payment method, so listen to the authoritative response from the People’s Bank of China.
The picture shows the audience walking in front of the digital renminbi sign in the Shougang Park of the Service Trade Fair on September 5. Photo by Xinhua News Agency reporter Wu Wei
1. How large will the issuance scale of digital RMB be?
After several years of hard work, my country’s digital RMB pilot program has formed a “10+1” pattern, including 10 pilot areas and the Beijing Winter Olympics scene. As of October 8 this year, there have been more than 3.5 million digital RMB pilot scenarios, with a total of 123 million personal wallets opened and a transaction amount of approximately 56 billion yuan.
Currently, the digital renminbi is still in the pilot stage of research and development, and the scale of issuance is relatively limited. However, as the scope of the pilot program continues to expand in the future, can the scale of digital RMB issuance meet the needs of the people?
“We always emphasize that the use and promotion of central bank digital currencies should follow the principles of marketization. That is to say, we will issue as much as the common people need to exchange.” Yi Gang, Governor of the People’s Bank of China, was established at the Bank of Finland’s Institute of Emerging Economies a few days ago. A clear answer was given in the video speech at the 30th anniversary event.
Digital renminbi and physical renminbi are issued concurrently. Some people are worried: If you want to have as much as you want, will it cause the problem of “excess currency issuance”?
Don’t worry, the People’s Bank of China has fully considered such issues when designing relevant regulations.
First, the digital renminbi adopts a two-tier operating system, and the People’s Bank of China implements centralized management. Yi Gang said that the commercial banks and payment institutions that consumers contact when they use digital renminbi are only “intermediaries” that exchange digital renminbi for the public and provide payment services. The People’s Bank of China is still at the center of the digital renminbi launch process, ensuring the ability to regulate currency issuance and monetary policy, and avoid the problem of “excess currency issuance” by designated operating agencies.
At the same time, digital renminbi is mainly positioned as a cash payment voucher (M0), without interest, ordinary people will naturally not convert large amounts of deposits into digital renminbi, nor will it trigger financial disintermediation and reduce the efficiency of monetary policy transmission.
In addition, measures such as setting the upper limit of the digital wallet balance and the upper limit of the transaction amount can effectively reduce risks such as runs.
The picture shows the staff of the Beijing Branch of Bank of Communications (left) guiding the tourist Ms. Li to open a digital RMB wallet on June 16. Photo by Xinhua News Agency reporter Chen Zhonghao
2. How long will RMB cash still exist?
Some people believe that as the inclusiveness and availability of digital renminbi continue to increase, it will gradually replace cash. Will renminbi cash withdraw from people’s lives?
“China has a vast territory, a large population, and large regional development differences. These factors and residents’ payment habits determine that cash will continue to exist for the foreseeable future.” Yi Gang made it clear that as long as there is a demand for cash, the People’s Bank of China will The cash supply will not be stopped or replaced by administrative orders.
At present, the dilemma of the “digital divide” among the elderly in the field of mobile payment cannot be ignored, and a considerable number of elderly people cannot enjoy the efficiency and convenience of digital renminbi. At the same time, in some relatively remote or impoverished areas, the deployment of electronic payment devices is also difficult to achieve full coverage. Therefore, many people still have a demand for using RMB cash, and their payment options should be respected.
It can be seen that the physical renminbi has the irreplaceable characteristics of other payment methods, and the physical renminbi will coexist with the digital renminbi for a long time.
3. How to protect the privacy of digital RMB?
In recent years, mobile payment has developed rapidly. Last year, the amount of mobile payment in my country increased by nearly 25% year-on-year, and the current penetration rate has reached 86%.
“However, the current electronic payment tools are mainly provided by the private sector, and there may be risks such as market segmentation and privacy leakage.” Yi Gang believes that the central bank digital currency (CBDC) enables the central bank to continue to provide the public with credible and secure payments in the digital economy era Means to maintain the stability of the payment system while improving payment efficiency.
So, how does digital currency handle the relationship between privacy protection and crime prevention? According to Yi Gang, a basic consensus of the international community is that CBDC cannot be completely anonymous, otherwise it will aggravate the risks of illegal transactions such as money laundering and terrorist financing and harm the public interest. Therefore, the digital renminbi has the characteristics of controllable anonymity.
“We attach great importance to the personal information protection of digital renminbi, and have adopted corresponding institutional arrangements and technical design.” According to Yi Gang, digital renminbi adopts the principle of “small amount anonymity and large amount traceable according to law” in terms of anonymity. When collecting personal information, follow the principle of “minimum and necessary”, and the amount of information collected is less than that of existing electronic payment tools. At the same time, strictly control the storage and use of personal information. Unless there is a clear legal requirement, the People’s Bank of China shall not provide relevant information to any third party or government agency. In addition, the recently promulgated data security law and personal information protection law in my country have also strengthened data security and privacy protection from the legislative level.
4. When will the digital renminbi be used across borders?
Currently, more than 110 countries have carried out CBDC-related work to varying degrees. When will the digital renminbi be used across borders?
“In view of the complexity of cross-border use, digital renminbi currently mainly meets the needs of domestic retail.” Yi Gang said that cross-border and international use are relatively complex, involving legal issues such as anti-money laundering and customer due diligence, which are being discussed internationally. The People’s Bank of China is willing to strengthen cooperation in the field of digital currency with central banks and international institutions.
Previously, the Digital Currency Research Institute of the People’s Bank of China, the Hong Kong Monetary Authority, the Central Bank of Thailand, and the Central Bank of the United Arab Emirates jointly initiated a multilateral central bank digital currency bridge research project to jointly study the role and technical feasibility of central bank digital currencies in cross-border payments . The People’s Bank of China also conducted technical exchanges with the European Central Bank on the design of CBDC.
Yi Gang said that in the future, the People’s Bank of China will continue to discuss CBDC standards and principles with central banks and international organizations in an open and inclusive manner, and properly respond to various risks and challenges in the process of promoting the development of the international monetary system.
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