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Digital RMB Application in SW China is One Step Closer

By ZHAN CHENICHONGQING|Apr 15,2022

Chongqing- The People’s Bank of China announced that 11 cities, including Chongqing, have been approved for the third batch of pilot areas for digital yuan on April 2.

Experts say that the digital renminbi (RMB), which has been applied to online shopping platforms and traditional supermarkets, greatly benefits individuals and society. 

Digital RMB & WeChat Pay & Alipay

Digital currency is closely related to people’s lives, its use and security have also been concerning issues among people. And the most discussed thing relies on the difference between digital RMB with WeChat Pay and Alipay, two of the most popular mobile payment platforms in China.

Mu Changchun, Director of the Digital Currency Research Institute of the People’s Bank of China, indicated that the two things are not fundamentally in the same dimension. 

The digital RMB is the legal currency issued by the central bank, while WeChat Pay and Alipay are the methods of payment. 

Mu drew an analogy that WeChat and Alipay can be considered wallets, while digital RMB is the money inside. 

Experts also addressed that digital RMB will not replace WeChat Pay and Alipay at all due to the essential difference. 

In the future, the digital RMB will be added as the new option for payment in WeChat and Alipay. In other words, people who use WeChat Pay and Alipay can choose not only the bank currency but also the digital one. 

Online shopping platforms

On the same day of the landing, the state banks and other operating institutions jointly initiated the first action: issuing digital yuan consumption bonus for residents, also called consumption red envelopes in Chinese. 

Meituan, a giant online shopping platform, provides a digital RMB consumption package worth 40 yuan for people who work and live in Chongqing. 

digital RMB

People show the digital RMB consumption bonus on their mobile phones. (iChongqing file photo)

Nearly 200,000 users have received the spree within ten days after the pilot landed in Chongqing. 

Data shows that 90% of the digital RMB consumption belongs to the small-scale but high-frequency consumption scenarios, from ordering food delivery to riding bicycles. 

Besides, various e-commerce platforms and financial institutions are designing and exploring more online consumption scenarios to conduct digital RMB activities to serve Chongqing citizens’ lives better. 

Traditional supermarkets

Besides the application of online shopping, conventional offline supermarkets attempted to embrace digital technology. 

Yonghui Supermarket is one of the traditional malls which takes the lead in applying this payment method. 

“Once the Chongqing pilot was approved, we began the large-scale technical testing,” said a person in charge. 

The sources from other large traditional supermarkets indicated that the payment simulation tests had been completed at 14 stores, and now they have the software and hardware conditions for digital currency. 

So far, 150 stores have access to the payment function with digital yuan by scanning the QR code (quick response code). People only need to show their payment code to finish the payment. 

digital RMB

People pay digital RMB to purchase goods. (iChongqing file photo)

More special application scenarios 

Experts saw that Chongqing has a developed digital economy and active consumer market, which offer good conditions for the digital yuan to penetrate the people’s daily lives. 

The issuance of the digital yuan consumption bonus is expected to accelerate the popularization of digital currency among citizens and effectively subsidize its daily consumption. 

Currently, Chongqing proposed to expand the application scope and functions of digital RMB. To improve the digital currency ecosystem, Chongqing will work on exploring innovative special application scenarios constantly. 

In the future, the digital RMB will incorporate richer scenarios for consumers in a wide array of fields, including medical and health care, transportation and travel, entertainment and leisure, catering and accommodation, etc. 

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