Digital Currency Will Arrive In May. You Need To Know These Things Before Using It

Recently, the research and development progress of my country’s legal digital currency has attracted widespread attention from society. According to reports, the digital renminbi will first conduct internal closed pilot tests in Shenzhen, Suzhou, Xiongan New Area, Chengdu, and future Winter Olympics scenes. Staff in various district-level agencies, enterprises and institutions in Xiangcheng District, Suzhou City who receive wages through the four major state-owned banks of China Industrial and Agricultural Construction will complete the central bank digital currency (DC/EP) digital wallet by the end of April. Starting in May, 50% of the transportation subsidy in wages will be paid in digital currency.

Since the birth of Bitcoin, many people have asked: What impact will digital currency have on our daily lives? To this end, reporters from Science and Technology Daily interviewed Dong Ximiao, chief researcher of Xinwang Bank, Zhongguancun Internet Finance Research Institute, and Bi Tongtong, co-founder of a financial technology consulting company, to answer a series of hot issues caused by digitalization. currency.

1. What impact will the application of central bank digital currency have on daily life?

Dong Ximiao: RMB (banknotes and coins) is legal tender. According to laws and regulations, no institution or individual may refuse to use RMB. Similarly, the central bank’s digital currency is legal tender and a digital renminbi. Merchants cannot refuse its use, otherwise it will be considered illegal. In the future, with the implementation of the central bank's digital currency, users' payment options will be richer, more convenient, and faster. As the basis of all financial activities, more convenient and faster payment methods are conducive to reducing transaction costs and improving financial operation efficiency. In addition, the digital currency system helps track transaction dynamics and capital flows, and helps prevent illegal transactions such as money laundering.

Bi Tongtong: The implementation of digital currency will not happen overnight. There will be a process of popularization. But what is certain is that the issuance and implementation of the central bank’s digital currency will further promote the development of China’s “cashless society.” For people, the use of "electronic cash" in daily life will further increase. People in remote areas will have a deeper understanding of the benefits of central bank digital currencies. For example, a government or institution distributes cash subsidies to individuals. In the past, there may have been situations where some people did not have bank accounts. With the central bank's digital currency, as long as everyone downloads and registers the central bank's digital currency wallet, they can directly receive subsidies in the form of digital currency, which can effectively avoid the illegal misappropriation of special funds.

2. Will paper money be completely replaced?

Dong Ximiao: It is impossible for digital currency to completely replace cash. At least for now, there are still some technical limitations. In addition, due to different user habits, not everyone is accustomed to this payment method. For example, some older people may not accept digital currencies.

Bi Tongtong: Central bank digital currency will not completely replace paper money within a certain period of time. It will serve as a supplement to people's daily consumption payment methods. Moving towards a “cashless society” is a long-term process that may take decades or centuries to truly occur.

3. What are the similarities and differences between central bank digital currency and non-bank payments such as Alipay and WeChat?

Dong Ximiao: The central bank’s digital currency is legal tender. WeChat Pay and Alipay are just payment methods with different effects. Specifically, if an institution or individual does not accept Alipay or WeChat Pay, there is no legal issue. But it is illegal to refuse users to pay in cash or digital currency. In addition, national credit is behind legal currency, commercial bank credit is behind bank card payment, and Internet corporate credit is behind Alipay and WeChat payment. These three belong to different levels. Compared with non-bank payment methods, central bank digital currency is safer, more versatile, and does not require binding a bank account.

Bi Tongtong: From a public perspective and in terms of experience, central bank digital currency and third-party payment are used in similar ways, both requiring mobile terminal devices. But the personal assets of ordinary people on Alipay and WeChat are actually one account, and these two payment tools are settled with commercial banks. Transfers cannot be made between third-party payment tools such as Alipay and WeChat, but central bank digital currencies can break down barriers in the payment industry and support circulation between banks and payment tools. At the same time, both WeChat and Alipay accept real-name payments, and the central bank’s digital currency can meet people’s needs for anonymous payments to a certain extent.

4. Some analysts say that the central bank’s digital currency will impact the status of Alipay or WeChat Pay; others believe that Alipay and WeChat Pay have been used in a variety of scenarios, and the launch of the central bank’s digital currency may not bring too many surprises. is that so?

Dong Ximiao: The central bank’s digital currency has no impact on Alipay and WeChat Pay. The effect of digital currency is unmatched by WeChat Pay and Alipay. After the official launch of digital currency, no matter the amount or nature of payment, that is, whether it is purchasing goods, paying for services, paying taxes, etc., no payee can refuse to accept it. However, in the form of WeChat payment and Alipay, the payee can freely choose to accept it. or refuse. There may be a possibility - more and more people are using central bank digital currency, while fewer and fewer people are using Alipay and WeChat Pay.

Bi Tongtong: Whether the central bank’s digital currency will impact the market status of WeChat Pay and Alipay is a long-term process determined by the market, but in theory it will not affect the status of Alipay and WeChat Payment. Central bank digital currency will enter people's lives as a supplementary payment method. It is foreseeable that Alipay and WeChat Pay will also be connected to the central bank’s digital currency in the future. The functions of payment tools will be more diversified, but the channels and scenarios will not change.

5. With the advent of the digital currency era, what new problems may arise?

Dong Ximiao: For the entire society, the application of digital currency can reduce transaction costs, improve financial operation efficiency, and prevent illegal activities such as money laundering. However, it is still in the testing stage, and it will take time for formal application or even large-scale promotion. It will take some time for everyone to perceive and understand the advantages of digital currency.

Bi Tongtong: The arrival of the digital currency era will change the existing social structure and institutional functions to a certain extent. It is obvious that in the future, banknote printing plants may be closed and bank employees, especially ordinary tellers and ATM machines, may be further reduced. In addition, digital currency will also become a new means and cover for criminals to commit fraud. At present, scams under the banner of central bank digital currency have appeared in the market, and the central bank has also issued risk warnings many times. These are new problems that need to be faced in the future. (Reporter Dai Xiaopei)

标签： #Alipay #Digital Currency #Mobile Payment #Currency