On October 12, the People's Bank of China released the 17th article in the series of "Taking the Road of financial Development with Chinese Characteristics", "Firmly carry out the pilot work of digital RMB Research and Development", the author is the Digital Currency Research Institute of the People's Bank of China.

According to the central bank, as of August 31, 2022, the digital yuan pilot areas in 15 provinces (municipalities) had a total of 360 million transactions with a value of 10.04 billion yuan, and the number of merchants supporting digital yuan exceeded 5.6 million stores.

The central bank pointed out that it will continue to promote the sustainable and healthy development of digital renminbi business. We will support efforts to leverage the advantages of the digital RMB in public sectors such as finance, taxation and government affairs. Realize the interconnection between the digital RMB system and traditional electronic payment tools, so that consumers can "scan with one code".

The total transaction value of the digital yuan pilot area reached 10.04 billion yuan

The central bank pointed out that the pilot application and scenario construction of the digital renminbi are progressing smoothly. Up to now, the People's Bank of China has selected parts of 15 provinces (municipalities) to carry out digital renminbi pilots, and has identified 10 designated operating institutions through comprehensive evaluation.

According to reports, digital RMB has formed a large number of application models covering online and offline, replicable and promoted in the fields of wholesale and retail, catering, cultural and tourism, education and medical care, and public services. As of August 31, 2022, the pilot areas in 15 provinces (municipalities) have a total of 360 million transactions with a value of RMB 10.04 billion, and the number of merchants supporting digital RMB has exceeded 5.6 million.

Since 2022, the governments of the pilot regions have carried out nearly 30 digital RMB consumption red envelope activities around the themes of "promoting consumption", "fighting the epidemic" and "low-carbon travel", and commercial institutions have also carried out many market-oriented promotion activities, effectively promoting social consumption recovery and potential release. Many local e-government service platforms have launched digital RMB payment services, supporting online and offline channels to handle various public utility payments. In addition, the digital RMB service sinks to the county rural areas, and expands the coverage of rural financial services based on the special scenarios such as the sale of agricultural products and the issuance of subsidies for farmers.

The central bank concluded that the top-level design of the digital renminbi, such as the two-tier operation structure, has passed a comprehensive test, and its feasibility and reliability have been effectively verified. The open digital RMB ecosystem and competitive selection mechanism not only effectively mobilize the enthusiasm of market institutions, but also create a good environment for fair competition.

Explore connectivity with Hong Kong's "fast Turn" fast payment system

The central bank also introduced the important progress in product research and development, service upgrading and international exchanges of the digital RMB.

In terms of product research and development, the central bank pointed out that as a legal currency in digital form, the digital renminbi has trust advantages, interworking advantages and late-comer advantages in establishing an ecosystem supporting smart contract applications, which is conducive to improving the transparency of transactions and the intelligent level of fund management, and reducing settlement and compliance costs. At present, digital RMB smart contracts have been successfully applied in government subsidies, retail marketing, prepaid funds management and other fields.

For service upgrading, the central bank also pointed out that the People's Bank of China has always attached great importance to the construction of barrier-free service capacity, focused on bridging the "digital divide", put the practice of inclusive finance, create a digital RMB product system in line with the "people's" principle as an important concept of digital RMB research and development, and incorporated barrier-free into the overall planning at the beginning of product design.

In terms of participation in international exchanges, according to the central bank, on the one hand, the People's Bank of China actively participates in the multilateral Central Bank digital currency Bridge project advocated by the Bank for International Settlements, and explores the establishment of multilateral cooperation mechanisms and new cross-border payment infrastructure and arrangements for cross-border payments based on legal digital currencies. On the other hand, we will launch cross-boundary payment technology tests between the Mainland and Hong Kong, explore the interconnectivity between the digital RMB system and the local "fast transfer" rapid payment system, and support the Hong Kong dollar settlement needs of local residents and merchants in Hong Kong.

The central bank also pointed out that the People's Bank of China has deeply practiced the overall national security concept, established and improved the network security in-depth defense system, and always ran the security bottom line through the full life cycle of the digital renminbi application. Since the pilot, digital RMB related businesses have been running smoothly with no major security incidents.

Support in public areas such as finance, taxation and government affairs

Leverage the advantages of the digital renminbi

The central bank pointed out that it will continue to promote the sustainable and healthy development of digital renminbi business, including adhering to the people-centered, good product services; Adhere to the rule of law and standardization construction, and consolidate the rule of law and supervision foundation for the development of digital RMB; Adhere to market-oriented development and encourage win-win cooperation among all parties.

In terms of products and services, the Central bank will take into account customer privacy protection and security compliance, follow the principle of "anonymity of small amounts and traceability of large amounts according to law", and fully protect the reasonable personal information protection needs of the public. Promote the deep integration and mutual promotion of public business and personal business. It includes three aspects:

First, we will support micro, small and medium-sized enterprises in providing convenient funds management, payroll payment, purchase, sale and storage services. We will support efforts to leverage the advantages of the digital RMB in public sectors such as finance, taxation, and government affairs, and provide advanced payment services for government digitalization and intelligent governance.

The second is to realize the interconnection between the digital RMB system and traditional electronic payment tools, so that consumers can "pass through one code", and merchants can support various payment tools without increasing costs as much as possible.

Third, continue to promote the digital RMB barrier-free and age-appropriate capacity building, improve the barrier-free product specifications and standards system. Continue to deepen international cooperation and deeply participate in the construction of international governance in the field of digital currency.

In terms of the construction of the rule of law and standardization, the central bank will further improve the relevant laws and regulations and industry supporting policies of the digital RMB, consolidate the legal foundation of the digital RMB, and consolidate the legal compensation status of the digital RMB. Give full play to the role of financial infrastructure, strengthen the overall coordination of digital RMB business, risk control, technology, security and other aspects, and firmly hold the bottom line of safe operations.

In terms of market development, the central bank will encourage market entities to independently carry out promotion activities under the premise of adhering to centralized management and compliance with the law. Use smart contracts to achieve programmable features and create an open source ecological platform. Fully mobilize the enthusiasm of all parties, increase resource investment, and promote the quality and efficiency of the construction of the acceptance environment.

Source: Securities Times