Will the first public test of digital RMB be comparable to Alipay and WeChat in the future?

It’s coming, it’s really coming! This time, there was no oolong or BUG, ​​but it rained with thousands of red packets. On the last day of the National Holiday,The news that “Shenzhen Luohu Ten Million Digital RMB Red Packets Is Coming” brought Luohu District to the hot search list in the circle of friends, and also gave an indicator to the pilot process of China’s legal digital currency, which has attracted global attention.

Will the first public test of digital RMB be comparable to Alipay and WeChat in the future? 1

“Caijing” reporter Zhang Wei, Tang Jun

On the evening of October 8th, Shenzhen’s official authoritative publishing platform “Shenzhen Publishing” released WeChat news, saying that the “2020 Reward Luohu” series of consumer promotion activities had started again. This event is for individuals in Shenzhen to give out 10 million yuan “Luohu Digital RMB Red Packets”. Each red packet amounts to 200 yuan, and the total number of red packets is 50,000.

At the end of 2019, a reporter from Caijing exclusively reported that the central bank’s legal digital currency pilot project led by the People’s Bank of China, the four state-owned commercial banks of Industry, Agriculture, China, and China Construction, and China Mobile, China Telecom, and China Unicom participated. The project will be implemented in Shenzhen, Suzhou and other places.

In August of this year, the Ministry of Commerce made it clear: to carry out digital RMB pilot projects in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, and the pilot areas in the central and western regions where conditions permit. The People’s Bank of China formulates policy guarantee measures; first, Shenzhen, Chengdu, Suzhou, Xiong’an New District and other places and relevant departments of the future Winter Olympics scene will assist in the promotion, and follow-up will be expanded to other regions as the case may be.

Dong Ximiao, chief researcher of China Merchants Union Finance, told the Caijing reporter that this is the first public test of digital renminbi. The previous test did not involve public participation and was only conducted among financial institutions, government departments and relevant merchants. However, this is still a routine test in the digital RMB research and development process, and does not mean that the digital RMB will be launched.

According to the latest information from the reporter of Caijing, in July and August this year, individual catering stores in Luohu District of Shenzhen have already tested digital RMB payments to medical staff. Affected by the above digital RMB red envelope news, the A-share digital currency concept sector rose in unison. Among them, Xinchen Technology stopped rising after 2 pm (20%).

Designated more than 3000 merchants

According to the official website of Shenzhen, the digital RMB red envelopes are issued in the form of “lottery drawing”. The lottery registration channel will be opened from 0:00 on October 9th to 8:00 on October 11th, 2020. The applicants are individuals in Shenzhen, and appointment registration is required. Mainland mobile phone number and second-generation resident ID card.

Individuals who have won the lottery will download the “Digital RMB App” according to the SMS guidelines of the lottery. After opening the “Personal Digital Wallet”, they can receive the “Luohu Digital RMB Red Packet”.

According to an appointment experience person told the reporter of Caijing, to apply for an appointment, you need to click the appointment entry, agree to the issuance rules, fill in the identity information (name, ID number, mobile phone number), select the bank (four major banks) to receive the red envelope, and then submit for confirmation. The appointment is complete and waiting for the draw. “The experience of applying for an appointment feels very smooth, and there is no stuttering. I am very looking forward to how to use the payment link in the future.”

According to a banker in the Shenzhen area, today the Shenzhen financial circle has been screened by the appointment link. According to the rules, the winning individual will receive the winning text message at 18:00 on October 12.

It is understood that in order to complete the use of red envelopes, 3389 merchants in Luohu District, Shenzhen have completed the digital renminbi system transformation. Users who hold digital renminbi red envelopes can use them at the above-mentioned merchants. In addition, red envelopes cannot be transferred to others or exchanged back to their own bank For the account, the red envelope has a validity period of 7 days and 6 hours.

A staff member of a restaurant in Luohu District, Shenzhen introduced to a reporter from Caijing that in July this year, the restaurant had already opened up to medical staff to test digital renminbi payment. Specifically, the restaurant used a newly installed POS machine to scan the user’s digital renminbi. The QR code of the App (wallet) can be used to complete the payment. “This POS machine can scan not only the QR code of the digital RMB App, but also the QR code of Alipay and WeChat Pay. However, because the early stage is a pilot phase, it involves Account details are currently used in the store to scan digital RMB apps.”

The above clerk further introduced that their (medical staff) mobile wallet also holds 200 yuan, and the digital RMB payment experience is similar to the previous Alipay and WeChat QR code payment, but she has only operated a few customers, and the final experience still needs A large number of payment verification, “We are also looking forward to the next red envelope payment.”

The Caijing reporter noted that the 3389 merchants that have completed the transformation of the digital renminbi system cover shopping malls, supermarkets, life services, daily retail, and catering consumption, including Sinopec, China Resources Vanguard, Wal-Mart and other well-known merchants.

Dong Ximiao believes that the digital RMB adopts the “account loose coupling” model. That is, after downloading the Digital RMB App, after completing registration and logging in, you can use it without binding a bank account. This will enable the use of digital renminbi to be wider, meet the needs of the public who do not have bank accounts and payment accounts to use digital renminbi, and better play its characteristics and role as legal tender.

Industry insiders said that the Shenzhen pilot scene is designated merchants, and it is expected that there will be online car-hailing in the future. Prior public information showed that the People’s Bank of China Digital Currency Research Institute, Meituan, JD Digital, etc. are promoting digital RMB cooperation.

Digital currency concept stocks rise

In the afternoon after the news was released, the A-share digital currency concept sector rose in unison. Wind data shows that 27 digital currency concept stocks rose across the board. As of the close of October 9th, the share prices of Xinchen Technology, Sifang Jingchuang, Feitian Chengxin, and Yuyin shares rose more than 5%, and Xinchen Technology stopped rising (20%) after 2 pm.

Among the above listed companies, Xinchen Technology and Sifang Jingchuang are mainly engaged in the development of financial IT software to serve commercial banks, while Royal Bank is engaged in the development, production, sales and service of financial self-service equipment and software such as ATM machines. This happens to be Two areas that will benefit first.

The digital currency industry chain can be divided into three major parts: the issuance end, the placement end and the payment end. The issuance end is dominated by the central bank, and placement and payment will become the main market beneficiaries.

“Digital currency applications must have corresponding infrastructure and system transformations. Bank IT systems, ATM machines, POS machines and other financial equipment transformation related industries will be the first to benefit. We have estimated that these two areas will be tens of billions of market scale in the future. “Zhang Linjun (pseudonym), a computer industry analyst at a brokerage firm, told the reporter of Caijing.

“The leading vendors on the bank (IT system) side include Yuxin Technology, Everbright Technology, and Gaoweida, etc. On the machine side, they are mainly listed companies such as Radio Express, Newland, and New Country.” Zhang Linjun added. Wind data shows that since the beginning of the year, the listed companies with the largest share price increase in this sector are still top manufacturers such as Everbright Technology, Gaoweida, Feitian Chengxin, and Hang Seng Electronics.

He also emphasized: “The promotion of digital currency is not done overnight. It must be a slow process. It will be a slow process to pull the performance of related listed companies. Short-term stock price changes are mainly stimulated by news.”

It is worth mentioning that the digital currency red envelopes issued by Shenzhen this time will be issued directly through the digital RMB app, and third-party payment platforms are not involved.

“The positioning of digital currency is to replace paper money, and it will definitely have an impact on the existing payment industry structure in the future,” a researcher from a securities firm told Caijing reporter. “However, it is difficult to judge the specific impact at present.”

In this regard, Huaxi Securities believes that with the approach of digital currency, the payment industry will face major changes. In 2020 and beyond, the payment industry will enter a new era of digital currency. Specifically, the competition between Alipay and WeChat Pay will be rewritten, and the banking sector will return to its dominant position.

Pilot cities are expected to expand

In April of this year, public information also showed that 50% of the transportation subsidy in the salary of the agencies and enterprises at all levels in Xiangcheng District, Suzhou will be issued in the form of digital currency. The above-mentioned industry insiders pointed out that from the perspective of the progress of the pilot cities, Shenzhen’s digital renminbi pilot work is ahead.

“Shenzhen outperforms other cities is completely predictable, because the development team of the Central Bank Digital Currency Research Institute is in Shenzhen.” An official from a technology company in Shenzhen told a reporter from Caijing. In June 2018, the Central Bank Digital Currency Research Institute registered and established a wholly-owned subsidiary in Shenzhen, Shenzhen Financial Technology Co., Ltd., which paved the way for the central bank’s digital currency to first land in Shenzhen.

In addition, in August last year, the Central Committee of the Communist Party of China and the State Council issued the “Opinions on Supporting Shenzhen’s Construction of a Pilot Demonstration Zone of Socialism with Chinese Characteristics”, which proposed to create a digital economy innovative development pilot zone and support the development of digital currency research and mobile payment and other innovative applications in Shenzhen. “A very important reason for choosing Shenzhen as a digital currency pilot is to support Shenzhen as a pilot demonstration zone.” A person from a commercial bank previously told a reporter from Caijing.

In fact, as to the timetable for Shenzhen’s pilot digital renminbi, previously reported by Caijing, as early as November last year, the regulatory authorities had convened pilot banks to convene a meeting in Shenzhen, and carried out the selection and refinement of application scenarios. In-depth communication, pilot banks (the four major banks) will choose scenarios based on their own advantages and report to the central bank.

A person close to the pilot project team once said that the Shenzhen legal digital currency pilot program is divided into two phases. At the end of last year, the pilot program was closed in a small scale. This year is the second phase, which will be widely promoted in Shenzhen. “From the information point of view, Shenzhen is still advancing according to the schedule.”

Bankers pointed out that the acceleration of the digital renminbi pilot program started at the end of last year. From the perspective of policy information, the next phase is expected to be carried out in pilot areas in the central and western regions where conditions are available.

Dong Ximiao suggested that the digital renminbi pilot cities should be expanded in an orderly manner and the digital renminbi should be officially launched as soon as possible to better meet the public’s demand for digital legal tender in the digital age.

Liu Xiaochun, former president of Zheshang Bank and vice president of Shanghai New Finance Research Institute, told Caijing reporter that since it is an experiment, there is a possibility of risk. If there is no risk, it will be launched directly. This time it was launched in the form of lottery red envelopes, in fact, to prepare for the risk. On the one hand, it encourages the winners to consume and use it. On the other hand, even if the consumption is not successful, consumers will not lose. “It is worthy of recognition that the use of red envelopes in the consumption scene this time means that China’s digital renminbi has entered a substantial public test stage, and it was all internal tests before this.”

A professional once told a reporter from Caijing that whether digital currency can be launched as legal tender depends on many factors: whether it has the smallest impact on the entire economy, whether the technology is strong, whether the country is determined, and whether the people are willing to accept it.

The necessity of introducing legal digital currency has been discussed by the industry. “In order to protect our monetary sovereignty and legal currency status, we need to plan ahead.” Mu Changchun, director of the Central Bank’s Digital Currency Research Institute, pointed out in the “Get” course.

Intern Zhou Qing also contributed to this article