Digital RMB is getting closer, what are its advantages? Will "scanning" become a thing of the past?

With the popularity of smart phones, it has become common to use mobile phones to make various payments. However, the rise of mobile payments is bound to affect the liquidity of cash.

I wonder how many people still keep the habit of paying in cash? Now, not only in China, but also in many countries around the world, the use of cash is getting lower and lower. According to data from the Norwegian Central Bank, the current cash use rate in Norway is only 3%-4%. According to a McKinsey report, Norway is already the country with the lowest cash use rate in the world. Apart from Norway, China's current cash use rate is not very high, which can be seen from the proportion of mobile payments.  

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In October 2021, People's Bank of China Governor Yi Gang stated that the current penetration rate of mobile payments in China has reached 86%, and among various payment methods in the country, mobile payments account for half of the total, reaching 50%. The number of Internet users in China has reached 1.011 billion, of which 850 million are mobile payment users.

Why do people like to use mobile payment? It's simple, because mobile payment caters to the current busy pace of life of ordinary people. If you use cash, you have to wait for change or face the "dilemma" of not bringing enough cash. However, using mobile payment is very convenient. Just "scan" and you can easily complete the payment. Even if the wallet balance is insufficient, there are other overdraft software to pay.

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Thanks to hundreds of millions of mobile payment users, the central bank said that as of the end of December 2020, the total amount of mobile payment business was 432.16 trillion yuan, and it is expected to exceed 100 trillion yuan by 2025. However, although "scan" is very convenient, another payment method has recently entered the sight of ordinary people, that is, "touch and pay".

Where can “digital RMB” be used?

With the acceleration of digital transformation, the pilot process of digital RMB is also accelerating. In 2019, only a few places in the country launched pilot work, but by July 2021, digital RMB can be used for various payments in many places across the country. Among them, Hainan Province, as a pilot province for the application of digital RMB in the province, completed the province's first payment activity for the purchase of new energy vehicles using digital RMB on October 21, 2021.

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In other provinces and cities, it can also be used to scan cars, take the subway, pay provident funds or pay employee wages. The governor of the central bank stated at the G30 meeting that the current main use of the digital RMB is to meet various retail payments. However, in the future, cross-border use will be further developed.

The digital RMB is like the balance we have in our bank card or WeChat wallet, except that payment can be completed directly without going through third-party software. The international name of the digital RMB is "e-CNY", which is the "electronic version" of the RMB and has the same legal tender function as cash.

Although the central bank has not yet given accurate information on the full implementation of the digital RMB, judging from the current level of domestic pilot projects, it should not be far from full popularization. Moreover, in the "White Paper" released by the central bank, as of June 2021, the number of whitelist users has exceeded 10 million.

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Will “Scan” become a thing of the past?

As the pilot work progresses, the use of digital RMB is becoming more and more widespread. In response, many people have "abandoned" their original WeChat or Alipay and turned to the "embrace" of digital RMB. I believe many people are curious, since they are all payment software, what are the advantages of digital RMB?

First of all, the digital RMB does not rely on the Internet. Unlike WeChat and Alipay, you must have an Internet connection to scan the code to pay or complete the transfer. Moreover, in third-party payment software, although recharge does not require a fee, withdrawals do require a fee. If the withdrawal is a large amount, the fee is quite high.

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However, for the digital RMB, poor network or no network will not affect the payment status. Payment can be completed offline, and even withdrawals do not require payment of handling fees.

Secondly, the digital RMB is not a virtual currency that exists in a virtual wallet, but a national legal currency. The probability of criminals wanting to "steal" or "defraud" by various means is very low. Moreover, the digital RMB also has an "anonymity" function, which can protect the user's security and privacy to the greatest extent.

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Finally, the payment method of the digital RMB is “touch and pay”. You only need to touch the mobile phone and the device to complete the payment. It has to be said that this payment method is more time-saving and labor-saving than “scanning”.

Some people say that after the full popularization of digital RMB in the future, it may bring an impact to "scanning", and scanning will become a thing of the past. In fact, this statement is not impossible. After all, the high security factor, offline payment and high traceability make digital RMB have multiple guarantees.

It is worth mentioning that on October 22, 2021, the deputy director of the Financial Research Institute of the People’s Bank of China stated that the full-scenario coverage of the digital RMB will be further accelerated in the future. Maybe we won’t have to wait too long before everyone can use the digital RMB. Are you looking forward to this?

If it were you, would you choose digital RMB, WeChat or Alipay?