Original title: Digital RMB pilot survey: Suzhou Water trial double offline payment, Hong Kong wants to open up cross-border payment closed loop
Author: Chen Zhi
With the speed-up of the central bank’s DCEP pilot program, more and more local governments are actively striving for the pilot project of digital RMB.
On December 10, the proposal of Shanghai Municipal Committee of the Communist Party of China on formulating the fourteenth five year plan for Shanghai’s national economic and social development and the long-term goals for the year 2035 was officially released, which proposed “actively striving for the pilot application of digital RMB”.
In the view of industry insiders, the pilot application of digital RMB in Shanghai may not only focus on small retail scenarios, but also involve in the field of trade settlement and payment.
Prior to that, the digital currency Research Institute of the people’s Bank of China signed a strategic cooperation agreement with the people’s Government of Changning District of Shanghai. The two sides will establish Shanghai financial technology company to gradually realize the landing of trade finance blockchain platform and technology R & D center.
A day later, Suzhou held a pilot digital RMB issuance ceremony. The digital RMB red envelope issued this time can be consumed by designated offline merchants in Suzhou area through “digital RMB app” or online consumption through Jingdong Mall.
A bank IT department director familiar with the development of digital RMB said that with the increasing application scenarios of the central bank’s legal RMB, the relevant banks need to solve three challenges: first, continuously improve the stability of the digital RMB payment and settlement system and the efficiency of transaction processing and clearing, so as to meet the increasingly frequent and high-frequency digital RMB transaction volume, and effectively avoid double flowers Problems and other moral hazards appear, that is, in the environment of dual offline payment, some people take advantage of the digital RMB to spend it for the second time; third, based on the lack of interest income of digital RMB, how can relevant banks cooperate with businesses to launch more affordable digital RMB payment activities, so as to attract more people to use digital RMB and enhance the popularity of the latter Welcome.
It is worth noting that the application area of RMB legal figure of the central bank is no longer limited in China.
In early December, Yu Weiwen, President of the Hong Kong Monetary Authority, said that at present, the Hong Kong Monetary Authority and the digital currency Institute of the people’s Bank of China are studying the technical test of using digital RMB for cross-border payment and making corresponding technical preparations.
In his view, cross-border payment has problems such as long-term, high cost and low transparency. The reasons are different operating time zones, different implementation methods of international standards, and different technical standards of payment systems. However, it also gives more room for the development of digital RMB to solve the pain points of these industries.
“Of course, if digital RMB is to be popularized in the field of cross-border payment, there are still two prerequisites.” Li Lianxuan, chief researcher of the AUC cloud Chain Research Institute, pointed out. First, China has signed currency swap agreements with other countries, so as to open up the exchange and two-way circulation channels of overseas digital RMB, and the second is to build a multi-layer operation system and settlement mode of the Central Bank of China, commercial banks and overseas central banks, so as to ensure the efficient and stable operation of overseas transaction settlement and exchange of digital RMB.
Test double offline payment for the first time to solve the “Shuanghua” problem
On the evening of November 11, a launching ceremony of pilot digital RMB issuance was held in Suzhou.
Specifically, the people who win the digital RMB red envelope can either go to the designated offline merchants in Suzhou area through the “digital RMB app” or make online consumption through Jingdong Mall.
When the winning bidder uses digital RMB for payment, he / she will give priority to the red envelope. If the amount is insufficient, he / she can recharge his / her wallet before paying, or pay by combination of other payment methods.
In the view of industry insiders, compared with the public test of digital RMB red envelope distribution completed in Shenzhen, they are more concerned about the digital RMB red envelope double offline payment and online payment test of Internet scene carried out in Suzhou.
It is reported that this pilot project will select less than 1000 people from customers participating in the digital RMB consumption red packet lottery to participate in offline wallet experience. Once the digital RMB realizes the dual offline payment function, it will undoubtedly make the collection and payment and transfer functions of the digital RMB in the absence of the Internet, and make the digital RMB infinitely close to the “cash in circulation”.
The head of IT Department of the above-mentioned bank disclosed that another important purpose of the double offline payment test is to solve the double flower problem of digital RMB in this scenario. Previously, during the internal testing stage, they found that due to the low efficiency of the digital RMB system in transaction settlement, the digital RMB in the user’s wallet has not been “transferred” for a long time, so that they can use the digital RMB for secondary shopping, forming moral hazard.
“We intend to introduce a recovery mechanism, that is, if the user has double spending, the bank will recover the relevant consumption money from him. However, the legal department of the bank thinks that this is rather cumbersome and requires the bank to repeatedly communicate with users and collect sufficient evidence, which will consume a lot of manpower and material resources.” He pointed out. Therefore, they have done a lot of internal system tests to ensure that the settlement processing efficiency of digital RMB in the double offline payment scenario is greatly improved, and the probability of double flower problem is reduced as much as possible.
In the view of many banks participating in the pilot project of digital RMB, if the settlement processing efficiency of digital RMB in the field of dual offline payment is further improved, its application scenario is expected to extend to small trade and trade finance scenario, because many small and micro enterprises have higher requirements on the timeliness of upstream and downstream trade funds.
A person in charge of the East China branch of a joint-stock bank pointed out to the reporter that in order to properly solve the settlement and reconciliation problem of digital RMB in the trade scene, they have introduced a large number of block chain technologies to ensure that the capital settlement of enterprises in the upstream and downstream trade chain has “accounts to rely on”.
However, he found that if digital RMB is to be popularized in the field of trade settlement and supply chain finance, there are still two bottlenecks to be broken. One is that the existing blockchain technology still can not meet the demand of high concurrency of fund payment and settlement business in trade field; the other is that digital RMB cannot bring interest income, which makes some core enterprises of supply chain reluctant to use digital RMB to pay trade loans Because this will make the enterprise sacrifice a considerable capital interest return.
“At present, we are also trying to solve these bottlenecks.” He pointed out. For example, banks are learning from some technical concepts in the field of blockchain, including asymmetric encryption, workload proof, time stamp, etc., and combining with their own utxo mode, smart contract and other patents, to meet the high concurrency demand of digital RMB settlement business in the trade chain.
The journey of cross border payment scenario application
It is worth noting that with the accelerated pace of digital RMB R & D pilot, its internationalization process is quietly moving.
“Last year, we carried out research with the Central Bank of Thailand to solve various cross-border payment problems through the central bank’s digital currency and blockchain platform.” Yu Weiwen said that the current joint research has entered the second stage, including exploring specific business application solutions, and the operability and extensibility of the platform (i.e., extending to three or more central bank digital currencies).
In Li Lianxuan’s view, the prospect of cross-border payment of digital RMB is actually quite broad. On the one hand, many countries need to introduce digital currency to effectively solve the problems of limited circulation of domestic paper money, reduce the large fluctuation of exchange rate, and improve the tracking ability of money investment. On the other hand, they hope to increase the cross-border trade volume by popularizing cross-border payment of digital currency to local farmers, small and micro enterprises Industry creates more income.
“However, the internationalization of digital RMB also faces many challenges.” He pointed out. First, China needs to sign currency swap agreements with these countries, so as to create operational space for digital RMB exchange and two-way circulation. Second, all parties need to build a multi-layer operation system and settlement mode of the Central Bank of China, global commercial banks and overseas central banks, so as to ensure the stable and efficient processing efficiency of overseas circulation and exchange of digital RMB.
A person familiar with the research on cross-border payment of digital RMB pointed out to the reporter that cross-border payment of digital RMB may focus on the small retail scene of mainland tourists during their travel in Hong Kong. After all, the use of RMB in Hong Kong is quite popular. Its exchange and two-way circulation channels are quite smooth, and merchants are more willing to accept it, which brings more choices of payment methods for people in both places.
“If the digital RMB is effectively popularized in the Hong Kong mainland trade scenario, and even becomes a new choice for trade financing and settlement payment, relevant departments can choose the opportunity to promote the relevant mature operation system to other countries, and gradually promote the internationalization of digital RMB and its wider cross-border use.” He pointed out.