What is the digital yuan and what does it mean

Issued by the People's Bank of China, the digital yuan is a legal tender with national credit endorsement and legal solvency. Compared with virtual currencies such as Bitcoin, the digital yuan is a legal tender, equivalent to legal tender, and its effectiveness and security are the highest, while Bitcoin is a virtual asset that has no value basis and does not enjoy any sovereign credit guarantee, and cannot guarantee the stability of value. This is the most fundamental difference between CBDCs and crypto assets such as Bitcoin.

The digital yuan is a digital form of legal tender issued by the People's Bank of China.

It is operated by a designated operating institution and exchanged to the public, based on the generalized account system, supporting the loose coupling function of bank accounts, which is equivalent to banknotes and coins, has value characteristics and legal compensation, and supports controllable anonymity.

The concept of digital yuan has two key points, one is that digital yuan is a digital form of legal tender; Another point is that it is equivalent to banknotes and coins, and the digital yuan is mainly positioned at M0, that is, cash and coins in circulation.

At the end of 2019, the digital yuan was successively launched in Shenzhen, Suzhou, Xiong'an New Area, Chengdu and the future Winter Olympics, and by October 2020, six pilot test areas were added in Shanghai, Hainan, Changsha, Xi'an, Qingdao and Dalian.

The role of the digital yuan:

1. Avoid the disadvantages of banknotes and coins: high printing and issuance costs, inconvenient carrying, easy to anonymize and forge, and there is a risk of being used for money laundering and terrorist financing.

2. Meet some of people's normal anonymous payment needs, such as micropayment.

3. Greatly save the cost of coinage.

4. Under the epidemic, reduce the chance of virus transmission in currency transactions.

This requires the People's Bank of China, as a public sector, to provide tools and products with similar functions as a backup for the corresponding public goods.

The digital yuan is a digital form of legal tender issued by the People's Bank of China, which is operated by designated operating institutions, based on the generalized account system, supports the loose coupling function of bank accounts, and is equivalent to the physical yuan, with value characteristics and legal compensation.

The digital yuan is issued by the People's Bank of China and is a digital form of legal tender, with value characteristics and legal compensation. The digital yuan is equivalent to paper money and coins, and what can be bought with paper money, the digital yuan can be bought; The foreign currency that paper money can be exchanged for, and the digital yuan can also be exchanged.

The renminbi includes both physical and digital forms, which provides a legal basis for China's issuance of digital currency. The issuance of digital tokens is illegal in China - no unit or individual may produce or sell token tickets and digital tokens to replace RMB in the market.

Digital RMB is a legal digital currency that has not yet been issued by the People's Bank of China, that is, "digital currency electronic payment" (DC ep, digital currency electronic payment). The digital yuan is issued by the People's Bank of China, operated by designated operating institutions and exchanged to the public, based on the generalized account system, supporting the loose coupling function of bank accounts, equivalent to banknotes and coins, and has value characteristics and legal compensation of controllable and anonymous payment tools. Regarding the research progress, the top-level design, standard formulation, function research and development, joint debugging and testing have been completed, and the internal closed pilot test will start in April 2020.

The digital yuan is still in the pilot stage, nationwide, when it will be able to be used, the specific time has not yet been determined, it is estimated that it will be the next 1 or 2 years, we can wait for the official notice.

Personally, I think that by 25 years, it will be promoted nationwide, and the digital yuan has the support of many high-tech enterprises, plus the support of my country, it will definitely be promoted as soon as possible.

Specifically, it has relative advantages in terms of security, convenience, and cost of digital yuan. The electronic digital yuan (e-cny) is a digital form of legal tender issued by the People's Bank of China.

The concept of digital yuan, which is operated by designated operating institutions and publicly issued to support the loose coupling function of bank accounts and the function of banknotes and coins, has two key points, one is that the digital yuan is a digital form of legal tender, and the other is equivalent to banknotes and coins, and the digital yuan is mainly positioned as M0, that is, cash and coins in circulation.

The merchant scans the user's digital RMB APP payment code, consumes Lu digital RMB, clicks on his digital wallet, and clicks to upload payment to indicate that he or she has paid to the merchant, and the customer can choose to turn on or not turn on the small-amount passwordless payment when paying to the merchant for the first time.

When a customer chooses to enable micro-payment without password, the payment will be displayed after entering the wallet transaction password**, and if the customer chooses not to turn on micro-credit, the system will display direct debit**.

As a currency with legal status, CBDC has unlimited legal compensation and should be able to achieve the goals of representing national credit, safe custody, safe transactions, and anonymous circulation.

In April 2020, the digital yuan began an internal closed trial. Digital RMB is a legal digital currency that has not yet been issued by the People's Bank of China, and digital RMB has value characteristics and legal compensation.

RMB is positioned in M0, which is a legal tender and is a payment platform and a wallet in a popular sense.

Although the two are completely different concepts, in life, they are sometimes confused because the brother Xiang terminal experience is relatively consistent. In order to distinguish, it is carried out from the comparison of the two payment systems.

The digital yuan refers to the digital form of the renminbi, which is carefully issued by the Bank of China and adopts blockchain technology to "digital fiat currency", which has the same effect as cash. Because the digital yuan has unlimited legal compensation, it can effectively play its monetary function, and the generalized concept account system is used as the basis for wide praise, and the loosening coupling effect of bank accounts has the equivalent effect of banknotes and cherry sail coins.

Advantages of the digital yuan.

1. It has a lower issuance cost, which is easier and faster than the transaction of RMB, reducing the trouble of the public to make change, and the management of cash is more difficult, and the digital RMB can reduce the issuance cost to the greatest extent;

2. The digital yuan does not need to be bound to a bank card, which eliminates the control of the traditional bank account system;

3. In the absence of a network, you can also use digital yuan for consumption, but you must install a CD or EP wallet on your mobile phone to use it;

4. It is conducive to avoiding the shortcomings of banknotes and coins, and it is not easy to counterfeit, but it can meet people's normal needs for anonymous small payments.

The digital yuan, a digital form of legal tender issued by the People's Bank of China, is operated by designated operating institutions and exchanged to the public, and is equivalent to banknotes and coins. Different from Bitcoin, China's digital yuan is a digital form of legal tender, with value characteristics and legal compensation.

In transaction payment, no entity or individual can refuse to accept e-CNY. Making payments more convenient in advance to ensure security is definitely the first thing to consider for the digital yuan. The central bank digital currency DC EP adopts a two-tier operating system.

A single-tier operating system, in which the People's Bank of China directly issues digital currency to the public.

In the two-tier operation system, the People's Bank of China first exchanges digital currencies to banks, and then these institutions exchange them to the public. In this way, your salary will still have to be sent to your bank account first, and then converted into digital yuan.

The digital yuan is made up ofPeople's Bank of ChinaThe digital form of legal tender issued, simply put, is the electronic version of the RMB.

1. The status of the digital yuan

1.The digital yuan is a digital form of legal tender.

2.Another point is that it is equivalent to banknotes and coins, and the digital yuan is mainly positioned at M0, that is, cash and coins in circulation.

2. Functional characteristics of the digital yuan

1.Two-tier operating system:The People's Bank of China does not directly issue and exchange central bank digital currencies to the public, but first exchanges the digital yuan to designated operating institutions, such as commercial banks or other commercial institutions, and then these institutions exchange them to the public.

2.Support for loose coupling of bank accounts:You don't need a bank account to open a digital yuan wallet.

3.High security:In the event of misappropriation and other acts, for real-name wallets, e-CNY can provide a loss reporting function.

4.High Traceability:In the case that the competent authorities issue corresponding legal documents in strict accordance with the procedures, conduct corresponding data verification and cross-comparison, and provide information support for combating violations and crimes.

The above content reference: The Paper-digital yuan closed test will not affect the issuance and circulation of RMB.

Encyclopedia - Digital Yuan.

(1) The concept of digital yuanThe English abbreviation of the central bank's digital yuan is DCEP, which includes two parts: digital currency (digitalcurrency) and electronic payment (electronic payment). The digital yuan is a central bank liability, legal tender, guaranteed by national credit, and given mandatory and unlimited solvency by national law, which digitizes cash and equivalens it with the existing renminbi. In addition, according to China's classification of currency levels, the digital yuan is an alternative to M0, unlike other mobile payments, which belong to the M1 and M2 levels.

(2) The operation mode of the digital yuanThe digital yuan follows the "**bank-commercial bank" operation model. The first layer is that the central bank distributes RMB to commercial banks, which in turn must pay 100% of the reserves to the central bank, and the second layer is issued by commercial banks to users, which is almost the same as the traditional cash operation model.

Prior to this, the digital yuan also considered the central bank's method of users, that is, without using commercial banks as intermediaries, directly issued by the People's Bank of China to users, which can save a lot of manpower, material and financial resources, and is a new operation mode, which is completely different from the current cash operation mode. However, China ultimately chose a two-tier operation model, because this can ensure the unlimited legal compensation and coherence of the central bank's currency issuance, and minimize the impact on the existing currency issuance system.