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E-mail China.org.cn, October 15, 2024
Nikkei:
The PBC is actively planning the promotion of digital RMB, with research reaching the 10-year mark this year. What is the current progress with its empirical experiments in China? Additionally, in June of this year, the cross-border settlement pilot project for digital currencies, jointly developed by China and its Hong Kong region, Thailand and the UAE, entered the minimum viable product (MVP) stage. How do you evaluate the progress of this pilot project? Thank you.
Lu Lei:
Thank you for raising such cutting-edge questions. The construction of a legal currency system that aligns with the digital economy is a topic of great concern to central banks and international organizations. So far, there is no single model or successful paradigm. As you know, we have been actively planning, researching and promoting digital RMB for 10 years now. China's research and development of a digital RMB system aims to create a new system for the issuance and operation of RMB in a digital format that is tailored to the conditions of the digital economy. I need to emphasize that the digital economy, digital form of currency issuance and its operation represent a comprehensive reform, supporting the development of China's digital economy, improving the level of inclusive finance development and enhancing the efficiency of the currency and payment system operations. I have briefly introduced our goals and ideas to you. After more than 6 years of research and development, and over 4 years of pilot trials, spanning more than 10 years in total, we have preliminarily verified the feasibility and reliability of digital RMB in terms of theory, business and technology. We also aim to make it more compatible with the digital economy. Overall, progress has been smooth. I would like to provide a brief overview of the relevant situation.
First, a basic framework system has been established. Combining the overall situation of pilot projects with China's specific situation, we have initially formed a two-tier operational structure of "central bank plus operating institutions," with various systems being constantly improved.
Second, we have steadily expanding our R&D pilot projects, and continually exploring innovative application scenarios. At present, the digital yuan has been piloted in 17 provinces and equivalent administrative units, with applications spanning wholesale and retail, catering, culture and tourism, education as well as medical care. These pilots have yielded a batch of replicable and promotable application solutions both online and offline. The digital yuan has played a positive role in boosting consumption, promoting green transformation, and optimizing the business environment. By the end of June this year, the cumulative transaction amount of digital yuan had reached 7 trillion yuan.
Third, we have continually upgraded our services. On the one hand, we have consistently enriched the digital yuan product system, developing innovative products such as smart contracts, as well as barrier-free, age-appropriate and other functions. We have also promoted the wider acceptance of digital yuan to expand its coverage and bring greater convenience. On the other hand, we have continuously improved the digital yuan service system to offer greater convenience for foreign visitors to China. As you know, the digital yuan was used as an innovative payment method at the 2022 Beijing Winter Olympics, as well as the Chengdu Universiade and Hangzhou Asian Games in 2023. Next, the PBC will earnestly implement the spirit of the third plenary session of the 20th CPC Central Committee, grasp the general trend of digital development, continuously and steadily promote the research, development and application of the digital yuan, and consolidate the foundation for the development of the digital yuan.
This is the basic situation regarding the digital yuan, from its research and development to application. As you requested, I would like to delve into the cross-border digital currency experimental project currently underway. To be precise, such an experimental project is a multilateral central bank digital currency bridge project, which is led by the Bank for International Settlements (BIS) Hong Kong Innovation Centre, and is committed to exploring and solving the shortcomings of cross-border payments. Under the cooperation framework of the BIS, the Digital Currency Institute of the PBC, the Bank of Thailand, the Central Bank of the UAE and the Hong Kong Monetary Authority jointly participated in the project. Currently, the project has reached the minimum viable product (MVP) stage, enabling participating institutions within each jurisdiction to carry out real-world transactions in an orderly manner according to due procedures. In addition, the Group of 20 (G20) has put forward initiatives to improve cross-border payments, and several international organizations have studied the applicability of central bank digital currency in cross-border areas from different perspectives. The PBC is committed to actively participate in, conduct joint research and improve cross-border payments to foster connectivity of international financial infrastructure.
That is all from me. Thank you.
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