The digital renminbi is finally available, how is the experience?

The digital renminbi that has been circulating on the Internet for several months is finally available.

As one of the four pilot cities, Shenzhen has distributed 10 million yuan of digital RMB red envelopes to 50,000 citizens through lottery, which can be consumed at 3389 merchants without threshold. This is a landmark event of the digital currency of China's central bank .

At the same time, countries around the world are also accelerating the research and development and testing of digital currencies. Digital currency will become a new form of currency exclusive to the digital age, which is also an important milestone in the field of mobile payment .

As a result, the global economy and the consumption life of individuals may be affected to varying degrees.

Shenzhen took the lead in using digital renminbi, how was the experience?

As early as April this year, there were media reports that some agencies and institutions in Shenzhen, Xiongan, Chengdu, and Suzhou were piloting the use of the central bank's digital currency DC/EP to pay wages and subsidies.

Until August 14, the Ministry of Commerce issued the “Overall Plan for Deepening the Pilot Program for the Innovation and Development of Trade in Services”, which officially clarified the pilot digital renminbi in Shenzhen, Chengdu, Suzhou, Xiongan New District and other places in the future Winter Olympics.

Just a few days ago, the Shenzhen Municipal Government distributed 50,000 digital RMB red packets worth 200 yuan to local citizens. After receiving them, they can support digital RMB in Luohu District from 18:00 on October 12 to 24:00 on October 18 The merchants of the system make consumption.

The digital RMB red envelopes were drawn in the form of lottery, and a total of 1,913,847 people made appointments to register. On October 11, 50,000 winners were officially released, and some people started using digital renminbi for consumption yesterday.

Regarding digital renminbi, a previous article by Ai Faner also gave a detailed introduction . The functions and properties of this currency are exactly the same as banknotes, except that its form is digital, and there is no need to bind any bank accounts and payment accounts. It is mainly used to replace M0 currency (cash in circulation, namely banknotes and coins). ).

▲ Picture from: Hong Kong 01

"Digital RMB" combines the advantages of cash and mobile payment, which not only guarantees the convenience of mobile payment, but also retains the legal repayment, anonymity and dual offline payment of cash .

So what is the actual experience of using digital RMB?

To use digital renminbi, you first need to download the "digital renminbi APP", which is not online in major application stores. Winners can only download through the link provided in the text message and register with their mobile phone number.

Although users do not need to bind a bank account, because the digital renminbi is a two-tier operating system, the digital renminbi still needs to be exchanged to the public through commercial banks.

The colors of the digital renminbi that you choose to receive from different banks are different. Bank of China and Industrial and Commercial Bank of China are all red, China Construction Bank is blue, and Agricultural Bank is green. They are basically consistent with the color of the bank's logo.

In terms of usage, digital renminbi is similar to commonly used third-party payment platforms such as WeChat Pay and Alipay. You can choose to scan the code to pay, or display the payment code on the top for the merchant to scan, and you can also set whether to enable small-value secret-free payment.

The difference is that digital renminbi also supports "touch one touch" payment, which is a near field payment based on NFC. The experience is similar to using a transportation card to take a subway bus.

However, according to The Paper , pilot businesses in Shenzhen have not yet supported this feature. When a successful lottery tried to pay with "Pump" at a merchant in Luohu Mixc City, he was told that the service had not been activated yet.

At present, a total of 3389 merchants in Shenzhen have completed the transformation of the digital renminbi payment system, all of which are equipped with a new POS device specifically for swiping digital renminbi, and a "digital renminbi" sign is placed on the checkout counter.

▲ Picture from: The Paper

However, the public's enthusiasm for this new thing does not seem to be high. Some merchants have reported that not many people use it. Many merchants have not yet implemented digital RMB collection and payment. Some non-pilot merchants in the mall have not even heard of the number. RMB.

The service staff of some pilot merchants said that the experience of digital renminbi is similar to that of cloud QuickPass, but it is not as convenient and fast as usual mobile payment.

▲ Picture from: The Paper

It can be seen that there is still a lot of room for improvement in the experience of using the digital renminbi, which is exactly the significance of the pilot. It is reported that the bank that the merchant connects to will regularly send people to check whether the system and equipment are working properly.

In addition, digital renminbi is not a competing product of WeChat and Alipay, and its own legal compensation means that it can be circulated on all online payment platforms in the future, and it can even break through payment barriers between different platforms, and realize the mutual transfer of WeChat and Alipay. .

As for when other cities can use the digital renminbi, there is still no clear timetable. But what is certain is that an era of digital currency is coming.

Not only China, but many countries around the world have put digital currency development and testing on the agenda.

A large wave of digital currencies is on the way

In fact, there are many types of digital currencies. Both Bitcoin and Libra issued by Facebook are digital currencies, and what we are discussing here refers specifically to digital currencies (CBDC) issued by the National Central Bank such as DC/EP. The International Monetary Fund (IMF) ) The definition of CBDC is:

Central bank digital currency is a new form of currency, which is issued by the central bank digitally and has legal payment capabilities.

As for the difference between CBDC and other digital currencies, the Bank for International Settlements (BIS) once proposed a "currency flower" model , which is divided into four dimensions: issuer, currency form, availability, and implementation technology.

According to BIS statistics, 80% of central banks are developing digital currencies, and more than half of them have entered the research experiment and implementation stage .

Just a few days ago, BIS and the central banks of the seven countries also released the report " Central Bank Digital Currency: Basic Principles and Core Features ", which indicated the positions and attitudes of various countries towards digital currencies and is committed to using digital currencies for cross-border applications. Paid.

The European Central Bank also released a 55-page "Digital Euro" report last week, and has registered the "Digital Euro" as a trademark. It will decide whether to launch the digital euro project in mid-2021. European Central Bank President Christine Lagarde Means :

The consumption, savings and investment behavior of Europeans is becoming more and more digital. In a more digital economy, we must ensure the strength and autonomy of the European payment system.

The U.S. dollar, which is still dominant in international currencies, is no exception. In May of this year, the Digital Dollar Project in the United States released a white paper that proposed a framework for the U.S. Central Bank’s digital currency (CBDC), and pointed out that “digital dollars can help The United States maintains the status of the U.S. dollar as the world's reserve currency."

Former US Commodity Futures Trading Commission (CFTC) Chairman Chris Giancarlo is one of the main leaders of the digital dollar project. She said:

The digital dollar plan currently being launched will catalyze a digital and tokenized US currency that will coexist with other Federal Reserve debts and become a digital world and a cheaper, faster, and more inclusive global financial system settlement medium.

Among many central bank digital currency projects, China's digital renminbi is in a leading position . In a report entitled "The Rise of Central Bank Digital Currency: Driving Factors, Methods and Technologies" released by BIS, it was pointed out that "the most advanced CBDC project may be China's DC/EP" .

This is because the central bank established a digital currency research project team as early as 2014. In addition, mobile payments have been highly popular in China, and mature infrastructure and user habits will greatly reduce the difficulty of promoting digital renminbi.

Although there is almost no central bank's digital currency in which country has fully implemented it, judging from the coincident actions of various countries, digital currency has become the general trend.

Why are all countries in the world promoting digital currencies?

Whether it is China where mobile payment is extremely popular, the United States where credit cards are very developed, or Japan where cash consumption is still high, they are all promoting their own digital currencies, but the starting point is not exactly the same.

Not long ago, Fan Yifei, deputy governor of the People’s Bank of China, wrote an article expounding several important significances of the central bank’s promotion of digital renminbi :

The first is to maintain the status of legal tender and the right to issue currency. The emergence of digital currencies such as Bitcoin and Libra may have an impact on the national financial system.

The second is to improve the efficiency of the payment system. The feature of payment as settlement can improve the efficiency of capital turnover for enterprises and individuals.

In addition, digital currency can also make up for some of the shortcomings of traditional banknotes, such as reducing the high cost of banknotes from issuance to savings.

Digital RMB adopts a controllable anonymity mechanism, which can strengthen the monitoring and tracking of illegal activities such as money laundering and terrorist crimes, and ensure the privacy of users.

In addition, Huang Qifan , vice chairman of the China Center for International Economic Exchanges, also pointed out that the digital renminbi can also help promote the internationalization of the renminbi and reduce the cost of renminbi cross-border settlement.

This is also one of the reasons for the 180-degree change in attitudes towards digital currencies in Europe and the United States in the past two years. Previously, US Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jeroime Powell also stated that the Federal Reserve would not need to issue digital currencies for 5 years.

The sudden new crown pneumonia epidemic has also accelerated the development of digital currencies. During the epidemic, the demand for non-contact cashless payments has greatly increased, making more countries realize the need for an electronic payment method that is as inclusive as cash and resists widespread threats .

In a highly cashless country like Sweden, the issuance of CBDC is inevitable for the development of a cashless society, which allows citizens to use central bank fiat currencies in cashless transactions without distinction.

Some developing countries with immature payment infrastructure hope to use digital currencies to improve and reshape their monetary and financial systems.

However, CBDCs of various countries also have one thing in common, that is , they emphasize not to replace cash, but as a supplement to cash .

Because once cash is completely replaced with digital currency, it will have a huge impact on the existing financial system. Moreover, the digital currency, which requires smart devices such as mobile phones, cannot be used equally by everyone without barriers.

Huang Yiping , deputy dean of the National Development Research Institute of Peking University, pointed out that the ultimate determinant of the future competition between countries is not military power, but financial power, and digital currency is the ultimate place for future financial competition.

In the near future, we may witness another "payment war" whose scale and importance are far from the competition between WeChat Pay and Alipay.

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