Source: AAG Insight
Digital RMB is a legal digital currency to be issued by the People's Bank of China in the future. The digital RMB is operated and exchanged with the public by a designated operating agency, based on a broad account system, supporting the loosely coupled functions of bank accounts, at the same price as legal currencies, with value characteristics and legal solvency, and supporting controlled anonymity. A common interpretation of the above definition is that the digital RMB is issued with the endorsement of the central bank, exchanged with general commercial banks, and redeemed by consumers at these banks as if they were getting cash. The broad account system can be understood as a system in which a consumer's license plate number, cell phone number, ID card number and other identifiers can be placed in a personal account for easy use. Loose coupling means that users are not required to have a commercial bank account in order to use the digital RMB. In addition, digital RMB has the same effect as ordinary RMB and cannot be rejected by anyone when using. As for controlled anonymity, it means that the digital RMB can ensure privacy and traceability of all transactions during use, especially for fraud, money laundering and other illegal activities.
In addition, the digital RMB is quite different from other electronic payments and virtual currencies. Compared to Alipay and WeChat, the process of payment corresponds to the transaction of the two parties' respective bank deposits, the digital RMB itself is a direct cash currency transaction. In the future, digital RMB will realize offline payment, that is, users can pay by touching two offline cell phones, which can effectively avoid the threat to convenience and security caused by the network environment. Compared to blockchain-based virtual currencies such as Bitcoin, the biggest difference between digital RMB and other virtual currencies is its fiat currency and general equivalence properties. Similar to other banknotes and electronic payment scenarios, digital RMB will focus on small value, retail, and high-frequency transaction scenarios.
In order to promote the digital RMB pilot program, China's Ministry of Commerce issued the "Overall Program for Comprehensively Deepening Innovation and Development of Trade in Services" in August this year. The program indicates that it will be piloted in Shenzhen, Suzhou, Chengdu, Xiongan New Area, Winter Olympic venues and other areas in an orderly manner, and then gradually extended to a wider range of areas. Shenzhen has already launched a testing in October this year to push 50,000 digital RMB lucky bags with a total value of RMB 10 million to the citizens, which aroused great enthusiasm from the public. In the end, nearly 8.8 million RMB worth was spent and the results were optimistic. Recently, Suzhou, as the second pilot city, has also started the public test. Suzhou will offer 20 million RMB to consumers who qualify for the test. The test will open up online consumption channels for citizens, so that consumers can spend the digital money on JD.com, the largest B2C online shop in China. In addition, the offline "Touch & Pay" function will be introduced for the first time in Suzhou.
Although the central bank has repeatedly stated that the digital RMB is still in the testing stage and there is no official timetable for its launch. However, this advanced digital currency endorsed by the central bank, this electronic cash that can be paid securely without an Internet connection, this e-wallet that can be used conveniently without opening an account, and this open personal account that supports a wide range of scenarios, have to make us look forward to its future.
The Central Bank Further Pushes Digital RMB Pilot Project