Changchun central bank mu Changchun detailed digital RMB: what is the relationship with Alipay and Alipay?


Recently, the Shenzhen Municipal People’s government and the people’s Bank of China launched a pilot project of digital RMB, and the digital RMB officially came out, causing widespread heated discussion. What is the relationship between the issuance of digital RMB and banknotes? Will it replace paper money? Is there competition with WeChat and Alipay? On October 25, Mu Changchun, director of the digital currency Research Institute of the central bank, made a detailed explanation at the second Bund financial summit.
Mu Changchun stressed that the issuance of digital RMB is not realized by administrative coercion, but should be carried out in a market-oriented way, that is to say, people can issue as much as they need to exchange. In addition, the people’s Bank of China will not stop the supply of paper money as long as the people have the demand to use paper money. In the foreseeable future, digital RMB and paper money will coexist for a long time.
Digital RMB is equivalent to banknotes and coins
The so-called digital RMB is a legal tender in digital form issued by the people’s Bank of China. It is operated by the designated operating agencies and converted to the public. Based on the generalized account system, it supports the function of loose coupling of bank accounts (the loosely coupled system is usually a message based system). It is equivalent to banknotes and coins, has value characteristics and legal compensation, and supports controllable anonymity.
In essence, Mu Changchun said, “digital RMB is legal tender in digital form, equivalent to paper money and coins. In other words, digital RMB is mainly positioned at M0, that is, cash and coins in circulation.” This means that digital RMB is not a new currency, but a legal tender in digital form, that is, the digital form of RMB.
As for the news that “in Shenzhen’s second-hand housing transactions, some traders are forced to accept digital RMB, but they are not allowed to exchange gold or foreign currencies,” Mu Changchun said. At present, digital RMB has not been used to pilot the second-hand house trading scene, but has issued digital RMB red packets in Luohu District to promote consumption. In addition, digital RMB is equivalent to paper money and coins. What paper money can buy, digital RMB can also be bought. For foreign currency that paper money can exchange, digital RMB can also be exchanged.
At the same time, taking into account the positioning of M0, Mu Changchun stressed that digital RMB should adhere to the central supervision of the central bank, which will help to resist the erosion of encrypted assets and global stable currencies, and prevent the loss of currency issuance rights. “Under the centralized management system, the people’s Bank of China can prevent and combat money laundering, terrorist financing and other illegal and criminal acts, and effectively maintain financial stability.” He said.
“We have found that counterfeit digital RMB wallets have appeared in the market, so the people’s Bank of China is still facing the problem of anti-counterfeiting and anti-counterfeiting, just like the era of paper money.” Mu Changchun mentioned that in the era of paper money, the cost of anti-counterfeiting and anti-counterfeiting is high. In the era of digital RMB, in order to reduce the cost of anti-counterfeiting, it is necessary to coordinate the construction of digital RMB wallet ecology, so as to facilitate the identification of ordinary people. On the other hand, operators should develop their own features to provide more abundant payment and financial products.
Mu Changchun also said that in the process of adhering to the central management of the central bank, the following aspects should be achieved: first, overall management of the amount of digital RMB issuance to ensure 100% preparation and eliminate over issuance; second, to formulate unified business standards, technical specifications, security standards and application standards, so as to realize the interconnection between designated operating agencies and avoid payment barriers; third, to make overall planning Fourth, it is necessary to plan the construction of digital RMB issuing infrastructure, realize the interconnection of cross operating agencies, and ensure that there will be no payment barriers.
Digital RMB and paper money will coexist for a long time
For digital RMB, the public is still generally concerned. Will paper money still exist after the issuance of digital RMB? In response, Mu Changchun said: “as long as the people have the demand to use paper money, the people’s Bank of China will not stop the supply of paper money. I personally feel that in the foreseeable future, digital RMB and paper money will coexist for a long time
Like paper money, as a public product, digital currency has two meanings: on the one hand, digital RMB does not calculate interest; on the other hand, digital RMB is non-profit. Therefore, the central bank establishes a free digital RMB value transfer system and financial infrastructure, does not charge circulation fees to the issuing layer, and commercial banks do not charge customers service fees for the withdrawal and redemption of digital RMB.
“In order to mobilize the enthusiasm of all participants and sustainable operation, we should refer to the current cash arrangements, allocate certain fees, and establish a reasonable and effective incentive mechanism,” Mu said
Although the central bank does not charge the issuing layer fee and the commercial bank does not charge the customer’s withdrawal fee, how to solve this problem? Charge or not? How much do you charge if you want? “This issue should be decided by both sides in a market-oriented way through a market-oriented mechanism.” Mu Changchun said.
In addition, the M0 positioning of the central bank’s digital RMB has another meaning, that is, commercial banks provide the function of exchanging digital RMB. According to the requirements of the current legal system, only commercial banks can provide services for the public to exchange digital RMB. However, it should be noted that the exchange service is emphasized here, while the circulation service can be undertaken by the third-party payment institutions and other commercial banks.
The digital renminbi is not in the same dimension with WeChat and Alipay.
After the advent of digital renminbi, what is the relationship with WeChat and Alipay? What is the difference between the two? Mu Changchun also made an answer at the Bund financial summit. He said WeChat, Alipay and digital Renminbi are not in one dimension.
In the eyes of Changchun, WeChat and Alipay are financial infrastructure and wallet, while the digital renminbi is the payment tool and the content of the wallet. In the electronic payment scenario, the wallet of WeChat and Alipay is the deposit money of commercial banks. After the issuance of the digital renminbi, people can still pay with WeChat and Alipay, but the contents of the wallet increase the number of RMB central bank. At the same time, Tencent and ant’s commercial banks are also operating agencies, and there is no competition with digital RMB.

Mu Changchun also said that in the whole process of digital RMB ecological construction, we must maintain fair competition, ensure that the market plays a decisive role in resource allocation, and fully mobilize the enthusiasm and creativity of all parties in the market. “The issuance and circulation of digital RMB involves all aspects of society. It has never been the work of the people’s Bank of China alone, nor can a certain institution be able to complete on its own. It needs the joint efforts of the whole society.”