Yi Gang: RMB Digital R&D Progress, Privacy, Next Steps

On November 9, Li Gang, chairman of the board of directors of the company, announced the advancement of research and development of digital yuan in video conferencing for 30 years at the Institute of Business Administration of the Bank of China. Finland. With issues related to personal safety and financial security.

Yi Gang said that in the next phase, the company will urgently improve the design and implementation of the digital renminbi. The first is to establish the appropriate business model for the digital yuan through the introduction of cash management and banking strategies, the second is to improve regular payment, privacy, business protection and other functions, and the third is to improve coordination is to promote. Through digital and modern renminbi electronic devices to ensure security, convenience and integration, the fourth is to improve the development of the renminbi ecosystem and make it integrated and with the digital renminbi.

Below is a list of terms.

Hello women and men!

I am happy to celebrate the 30th anniversary of the Bank of Finland's Finnish Institute for Emerging Economies and to invite myself to this memorial to discuss the importance of Central Bank Digital Currency (CBDC) with another Bank director. Thanks to Governor Rehn for the invitation. . I would like to briefly describe the advancement of digital yuan in research and development and our role in protecting privacy and maintaining financial security in the process.

1. Advancement of digital yuan research and development

Global electronic payments, especially telephone payments, have grown rapidly in recent years, especially after the spread of the COVID-19 virus. Last year, mobile phone payments in China increased by 25% compared to last year, and now reaches 86%, which facilitates residents' lives and strongly supports isolation work. However, since current electronic payments are usually provided by private capital, there may be risks such as commercial division and personal data. The CBDC enables central banks to continuously ensure public confidence and security in the digital marketplace and increase payment efficiency while maintaining payment security.

Currently, more than 110 countries are working on CBDC-related issues at different levels. For China, the research and development of the digital renminbi is only aimed at meeting the needs of the door-to-door payment market, improving the level of improvement of the financial system, and better adjusting the performance of benefits and payments.

The company has been studying digital currency law since 2014, and in 2016 it developed a first-generation digital currency bank model in China and developed basic functions such as M0 position and secondary operation. Anonymous and controllable system. Since 2017, the People's Republic of China has been cooperating with businesses and Internet companies to jointly develop digital RMB. The digital renminbi started rolling in late 2019 and now includes stages from 10 cities and the 2022 Beijing Winter Olympics. other use cases. In July this year, the company announced a free digital yuan. As of October 8 this year, there were more than 3.5 million digital renminbi pilot scenarios and a total of 123 million personal wallets, with a turnover of 56 billion yuan.

In the next step, based on the driving problem, we will improve the design and implementation of the digital renminbi in the plan.The first is to establish the appropriate business model for the digital yuan through the introduction of cash management and banking strategies, the second is to improve regular payment, privacy, business protection and other functions, and the third is to improve coordination is to promote. Through digital and modern renminbi electronic devices to ensure security, convenience and integration, the fourth is to improve the development of the renminbi ecosystem and make it integrated and with the digital renminbi.

2. Respond to CBDC's impact on financial security and strictly protect personal information.

The CBDC's impact on financial policy and financial security largely depends on the formation of the CBDC. If the CBDCs are close to cash, the impact will be limited. However, if he owns the assets of financial instruments such as deposits, this will cause changes, reduce the magnitude of the financial impact and reduce the benefits of remittances.

With this in mind, the People's Republic of China should research and develop effective development plans to reduce the negative impact. First, we follow the M0 site of the digital renminbi, which offers no interest rates and reduces competition from banks. Second, it implements a two-pronged approach that enables the bank to be able to centrally manage advertising and financial management, and act as an influencer for businesses and payment companies to exchange digital RMB and provide payment services. Public. Third, the risk of success is minimized by setting internal interfaces such as upper wallet limit and exchange rate. At the same time, the impact on financial policy, financial performance and financial security while driving is also an important test.

CBDCs should address the relationship between privacy and counterterrorism. The current international consensus is that CBDCs cannot remain anonymous, otherwise they pose a risk of illegal transactions such as financial transactions and financial fraud and may cause public harm. However, there are questions about whether digital banking will require the bank to manage more information.

We value the privacy of the digital renminbi and have access to in-house equipment and design. In terms of anonymity, the digital yuan has adopted the principle of "anonymous small funds, big data develops legally" and "at least fully and reasonably adheres to the 'principle' when collecting personal data, and the data stored less than recommended. the past. payment tools. At the same time, the collection and use of personal information is strictly regulated, and the Company does not disclose any sensitive information to third parties or government entities, except clear law. China recently enacted several laws, including the Information Security Law and the Privacy Protection Law, to strengthen the security and protection of personal information at the legal level.

3. Plan your next steps

We have always maintained that the use and promotion of central bank digital currencies should be in accordance with the principles of commerce. In other words, we give as much as people want to change. The vast area of ​​China, its population, the development of different regions, these situations and the payment attitude of its residents determine that the money will be available in the future. As long as a request for money is requested, the PBOC will not waive the money or replace it with an administrator.

The design and implementation of the digital renminbi is generally aimed at meeting the needs of door-to-door retailers. Cross-border and international use is fraught with legal issues such as protectionism, economy and passion, and there is global controversy. Given the difficulty of cross-border use, the digital yuan is now focusing on home retailers.

The People's Financial Institution of China is pleased to promote cooperation in the digital currency market with central banks and international organizations of many countries. We are a multi-digital banking company with banks for international settlements, the Bank of Thailand, the Central Bank of the United Arab Emirates and the Hong Kong Monetary Authority. Central bank digital currency in cross-border payments. We also had an exchange with the European Central Bank on the establishment of the CBDC. We will continue to be open and engaged in discussions on CBDC standards and principles with central banks and international organizations, and respond appropriately to the various risks and issues that arise in the process of supporting the growth of the Mondial economy.

Finally, I wish this meeting a success! Thank you all!