Digital Currency Will Take e-Payments to the Next Level
By Tang Zhexiao
Along with the information technology and the digital economy boom, China's e-payment mechanisms, especially the rapid development of mobile payment, provide the public with a convenient and efficient retail payment service.
While boosting the development of the digital economy, e-payment has also increased the public's demand for technology and the provision of an innovative currency service.
Issued by the People's Bank of China (PBOC), China's digital currency, known as e-CNY, will be operated by designated institutions with the equivalent value of Chinese Yuan (CNY).
To use the e-CNY option, you need to download the digital wallet App on your smart phone and complete the registration, basically the same as Alipay and WeChat payments.
The e-CNY and general electronic payment tools are in different dimensions, which are both complementary and different. According to Mu Changchun, director-general of the PBOC Digital Currency Research Institute, the e-CNY owns characteristics of payment-as-settlement and anonymity, with low cost, high portability and high efficiency.
As the central bank of China, PBOC has been pioneering the digital currency project from as early as 2014. It set up a team to conduct special research on the framework, key technologies, issuance, circulation environment and relevant international experience of digital currency.
At the end of 2017, the POBC organized some commercial banks and relevant institutions to jointly develop a digital currency system.
China published its first report on the progress in the ongoing research and development (R&D) of its digital currency e-CNY recently, revealing that the R&D experiment has basically completed the top-level design, functional research and development, with pilot testing areas in Shenzhen, Suzhou, Xiong'an New Area, Chengdu launched and six other areas added.
By June 30, there had been more than 1.32 million scenarios for e-CNY pilot projects, covering fields of living expenses, catering services, transportation, shopping and government affairs services, with a total of 70.75 million transactions worth about 34.5 billion CNY.
The digitalization of fiat money is a global trend, which is driving more than 60 countries around the world to experiment with it.
The e-CNY will coexist with traditional electronic payment tools for a long time in the future, said Fan Yifei, the PBOC's deputy governor. The PBOC will further expand the coverage of e-CNY pilot application scenarios to achieve full coverage in specific pilot areas and to build a digital e-CNY ecosystem.
The PBOC is also willing to actively participate in the international exchange of views on digital fiat currency and discuss its standard-setting in an open and inclusive manner, so as to jointly promote the development of the international monetary system.