On February 9, 2022, according to the disclosure of the Chinese government website, the people’s Bank of China, the State Administration of market supervision, the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission issued the 14th five year development plan for financial standardization, proposing to “steadily promote the development of legal digital currency standards”, A chapter describes the requirements of legal currency in detail. Policy proposal, “We will explore the establishment and improvement of legal digital currency infrastructure standards by comprehensively considering security and trusted infrastructure, issuance and storage systems, registration centers, payment and transaction communication modules, terminal applications, etc. we will study and formulate legal digital currency information security standards to ensure that the flow process is storable, unforgeable, non repeatable and non repudiation.” Set legal digital currency business and application standards, and determine the standardized processes of issuance, circulation and withdrawal. Research and formulate statutory digital monetary standard, help to improve the legal digital money technology security and advanced nature. Research and formulate the basic data element standard of legal digital currency to improve the standardization of data. Study and formulate technical standards for legal digital currency terminals, and promote the improvement of terminal acceptance environment. Study and formulate legal digital currency evaluation and detection standards, and standardize the detection indicators of relevant systems and products. “
The use of digital RMB has increased, the Winter Olympics scene has landed, and the standard development is expected to speed up
The number of digital RMB pilot scenarios and personal wallets continued to increase. According to the white paper on the research and development progress of China’s digital RMB, as of June 30, 2021, there have been more than 1.32 million digital RMB pilot scenarios, more than 20.87 million personal wallets have been opened, and the cumulative transaction amount is about 34.5 billion yuan. At the press conference of the state information office on January 18, 2022, Zou LAN, director of the financial market department of the central bank, introduced that “as of December 31, 2021, there have been more than 8.0851 million digital RMB pilot scenarios, 261 million personal wallets have been opened, and the transaction amount is 87.565 billion yuan”. The number of digital RMB pilot scenarios increased from 1.32 million to 8.09 million in half a year, and the number of personal wallets increased from 20.87 million to 261 million, reflecting the continuous expansion of the application scope of digital RMB.
Under the Winter Olympics scenario, multiple application functions of digital RMB are implemented. According to the report of the financial times, the application functions of digital RMB in the Winter Olympic scenario are more diversified, mainly including: 1) the account is loosely coupled, and the digital RMB wallet can be opened directly through the mobile phone number. Foreign friends who come to China can download the digital RMB app and register to open four types of digital RMB wallets through their mobile phone number. At present, the digital RMB app has been put on the shelves in various mobile app stores in China (including Hong Kong, Macao and Taiwan), and can also be downloaded through the Apple App store. The digital RMB app supports the mobile phone number registration and wallet opening of nearly 100 countries and regions participating in the Winter Olympics. 2) “Touch and touch” helps contactless payment. In Wumart supermarket in the Winter Olympic Village, consumers can successfully complete the payment by using the Winter Olympic themed digital RMB Hard Wallet and “touching” the merchant POS machines and tools across the glass, which is also the only payment method that can realize “non connection through windows”. 3) Hard wallets come in many forms. The forms of digital RMB Hard Wallet under the Winter Olympics scene include five-color Bracelet wallet, smart electronic card wallet, lunar new year of the tiger wallet and key pendant wallet, etc. 4) “Paste a paste” realizes mobile phone management and hard wallet. The “paste and paste” function can read the device loaded with digital RMB hardware wallet. After turning on the mobile phone NFC function, keep the hardware wallet close to the mobile phone NFC area, and the mobile app can read the hardware wallet information. It can set the password, recharge and redeem the hardware wallet, query the balance and transaction details, etc.
The standard development is expected to speed up and lay the foundation for large-scale promotion. The promulgation of the 14th five year plan for the development of financial standardization puts forward new requirements for the development of digital RMB standards. We believe that standard setting is an important link in industrial development. A unified digital RMB infrastructure, issuance and circulation return process and terminal acceptance environment will become the preconditions for the large-scale promotion of digital RMB. The unification of standards will lay a solid foundation for the deepening of digital RMB application scenarios and the expansion of application fields in the future.
Focus on investment opportunities of digital RMB industrial chain
We believe that the digital RMB industry chain mainly includes five types of enterprises. We suggest paying attention to the investment opportunities of relevant listed companies: 1) financial machinery enterprises: Grg Banking Equipment Co.Ltd(002152) , Newland Digital Technology Co.Ltd(000997) , Xgd Inc(300130) , Shanghai Guao Electronic Technology Co.Ltd(300551) ; 2) Bank IT enterprises: Digital China Information Service Company Ltd(000555) , Shenzhen Sunline Tech Co.Ltd(300348) , Yusys Technologies Co.Ltd(300674) , Client Service International Inc(300663) , Northking Information Technology Co.Ltd(002987) ; 3) Payment institution: Lakala Payment Co.Ltd(300773) ; 4) Encryption algorithm enterprise: Beijing Certificate Authority Co.Ltd(300579) , Koal Software Co.Ltd(603232) , Beijing Infosec Technologies Co.Ltd(688201) ; 5) Application scenario: Enterprise: Zhejiang Zhengyuan Zhihui Technology Co.Ltd(300645) , Newcapec Electronics Co.Ltd(300248) .
Risk tips
The strength of digital RMB policy is less than expected, the maturity of digital RMB technology is less than expected, the construction cost of digital RMB system is more than expected, and the calculation of market scale is less than expected.
