A staff member of the bank helps a client to open a digital RMB wallet on a mobile phone. [Photo by Jin Lu]
By Jin Lu
Transferring money by merely putting two phones towards together, without bank accounts or even an internet connection? Such a fantasy becomes a reality once e-CNY, China's digital currency, is launched.
On April 2^nd, the People's Bank of China, the central bank, released a list of new regions for e-CNY trials. Ningbo has also been added.
E-CNY Coupons to Boost
In Ningbo, there are increasing number of application scenarios for the digital yuan. More attractively, the city has given multiple set of consumption coupons to residents, which effectively boosted offline consumption.
For example, the on-the-roadside parking fee can already be easily paid with digital RMB. If paying through the Agriculture Bank of China's (ABC) mobile bank, citizens can enjoy discounts on parking fees. The parking fee can be as low as 1 cent, and the discount caps at 5 yuan.
The way to enjoy the discount is simple: firstly, download the digital currency application, select the ABC wallet to register and activate, bind the card to upgrade to the second-class wallet, and then recharge the wallet for use.
When paying the parking fee, open the 'Yongcheng Parking' application, tap on the order, and the digital RMB payment option will appear, just tap again to pay and the coupon can be used.
At Ningbo Tech University, the province's first digital RMB university scene has been created.
"I've heard about digital renminbi for a long time, and I have just experienced it." Wu Dong, a student at the university, received a 10-yuan consumption coupon. Afterwards, he went shopping at the convenience store downstairs, scanned the merchant's QR code with the application, and the coupon was redeemed on the spot.
Digital Yuan Makes
It is learned that e-CNY is the digital version of fiat currency issued by the China's central bank and operated by authorized agents.
Equivalent to paper currency bills and coins, e-CNY will meet people's demand for digital currency and help develop financial services in the country. It will help build a new trading pattern, which in turn will help boost global cooperation.
The e-CNY has all the basic functions of money, that is, unit of account, medium of exchange, and store of value, and its issuance and circulation are almost identical to that of the physical yuan-only that instead of being physically transferred, it will be transferred in a digital form.
The benefits of boosting the use of e-CNY are obvious. First, it will meet people's demand for fiat digital currency for mobile payments and lower, if not remove, the barriers to access financial tools and services.
Second, e-CNY will accelerate the yuan's internationalization process, as its point-to-point and end-to-end payment feature will lower the costs of cross-border transactions and make them more efficient.
For Ningbo, e-CNY is not only a means of payment, but also a 'new infrastructure' for the digital economy. Ningbo will seize the opportunity to take the lead and accelerate the regional financial reform.
The reporter learned that Ningbo is planning to give out millions of digital RMB red envelopes through online platform to boost consumption and business recovery.
Digital Yuan Makes
"It's perfect timing to expand the trial regions in an orderly manner, since the digital renminbi trials have formed a number of replicable application models in fields such as retailing, catering, and culture and tourism," said Zheng Lei, Deputy Head of International New Economic Research Institute.
"With more regions joining in the piloting, the digital yuan will become increasingly accessible in daily life," he said.
Analysts have said that the expansion of piloting will help test e-CNY's function and security more thoroughly and at a greater scope.
According to Su Xiaorui, a senior analyst at the Analysys, a consultancy, the digital renminbi is likely to have more application scenarios in sectors such as travel, e-commerce, and retailing, while gradually increasing its presence in industrial supply chain financing, enterprise-level trade, and some other real economy sectors, thanks to the increasing piloting.
Zheng said the digital yuan is expected to be used beyond retail payment scenarios in the near future after more tests are conducted in China's banking system.
As of April 26, 317,000 digital RMB wallets have been opened, with 97,200 transactions worth 20.09 million yuan; there are more than 6,700 offline merchant stores that accept digital RMB payments.