Mu Changchun, head of the People's Bank of China: Digital RMB as a payment tool for all retail scenarios

According to The Paper, Mu Changchun, the director of the Digital Currency Research Institute of the People's Bank of China, stated at the "2023 China International Finance Annual Forum" that the goal is to use digital renminbi as a payment tool in all retail scenarios.

Mu Changchun previously mentioned: Bitcoin, Libra are harmful to national monetary sovereignty

Digital Renminbi: China promotes digital renminbi in cities along the Belt and Road, with Hong Kong as a cross-border payment experimental ground

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Mu Changchun: Definition and Characteristics of Digital Currency

Digital currency, also known as digital renminbi, utilizes the latest internet and mobile payment technologies to achieve a major upgrade in the issuance and payment system through the restructuring of organizational forms and business models. It combines the physical ownership features and anonymity functions of cash with the portability, ease of use, and traceability of electronic payment tools, evolving into a universal payment tool suitable for the development of the digital economy.

Mu Changchun: Retail Applications of Digital Currency, Apps Need Regulatory Compliance

Mu Changchun stated that the first upgrade to be achieved is the payment tool used in retail scenarios, namely using digital currency as the payment tool for all retail scenarios.

Wallet providers such as WeChat, Alipay, commercial banks' apps like Bank of Communications' Handset Banking App, and other third-party payment institutions' apps, including digital currency operators, need to have compliance awareness, obtain relevant financial licenses, and comply with regulations.

In the short term, unifying the QR code standards technically to achieve barcode interoperability is feasible; in the long term, the upgrade of payment tools will be steadily implemented.

Mu Changchun: Wholesale Applications of Digital Currency, Interconnection with Existing Electronic Payments and Commercial Deposits

The payment tools used in wholesale payment scenarios also need to be upgraded.

Currently, the interbank payment clearing system and commercial bank internal systems that support wholesale payments operate normally and can meet the needs of China's economic development.

To avoid wasting existing systems and resources, there is no need to replace them with the central bank's digital currency system. However, achieving comprehensive interoperability between digital currency and existing electronic payment tools and commercial bank deposits can seamlessly connect them.

For financial market infrastructures that were previously not covered, digital currency can be used for settlement, and smart contracts can be used to achieve Delivery versus Payment (DVP) and Payment versus Payment (PVP), thereby enhancing the efficiency of wholesale payments.