CBDC and cross-border payment: give play to the technical advantages of blockchain to reduce costs and increase efficiency. According to the latest FSB report, in October 2021, the FSB released a report on improving the progress of cross-border payment, saying that it would explore the application of global stability currency in cross-border payment before December 2022 to improve the current situation of cross-border payment. FSB has also set specific goals: by the end of 2027, it plans to reduce the global average retail payment cost to less than 1% and the total channel payment cost to less than 3%. We believe that CBDC has the technical conditions for cross-border use.
Practical progress of cross-border payment CBDC project. (1) Hong Kong, China & Thailand nathanon Lionrock project. The proof of concept of the nathanon Lionrock project has been successfully completed and confirmed the technical feasibility of the central bank’s digital currency model in actually solving the main pain points of cross-border capital transfer. Through the nathanon Lionrock project, the central banks of Hong Kong, China and Thailand can support real-time cross-border fund transfer, reduce intermediaries and units involved in the settlement process, improve efficiency, reduce costs, reduce settlement risks, improve the transparency of fund transfer and meet compliance requirements. (2) Singapore Ubin project. The significance of Singapore Ubin project is that it has explored the possibility of digitizing the Singapore dollar and carried out a number of financial practices based on blockchain technology. (3) Jasper project in Canada. The Jasper project in Canada is the first time in the world that the central bank cooperates with the private sector to participate in the distributed ledger Technology (DLT) experiment.
Digital RMB has begun to lay out the territory of cross-border payment. The earliest experimental scenarios of digital RMB cross-border payment are expected to appear in Hong Kong, China and Singapore. (1) In August 2020, the general office of Hebei Provincial People’s government issued the notice on the construction and implementation plan of China (xiong’an New District) cross-border e-commerce comprehensive pilot zone, which proposed to encourage the use of RMB pricing and settlement in cross-border e-commerce activities and explore the cross-border payment of digital currency. (2) According to the announcement of public chain conflux in September 2021, conflux will pilot offshore RMB stable currency cross-border payment in Shanghai free trade zone. (3) The people’s Bank of China cooperates with the Hong Kong Monetary Authority to test the digital RMB.
Investment proposal and investment object
Consistent with other cbdcs, digital RMB also has the potential to enhance cross-border payment efficiency and reduce cross-border payment costs. With the expansion of digital RMB pilot and the continuous promotion of cross-border payment research, it is suggested to pay attention to digital RMB software and hardware suppliers, such as Shenzhen Forms Syntron Information Co.Ltd(300468) ( Shenzhen Forms Syntron Information Co.Ltd(300468) , not rated), Lakala Payment Co.Ltd(300773) ( Lakala Payment Co.Ltd(300773) , not rated).
Insurance Tips
The landing process of CBDC is not as expected; The construction of CBDC primary and secondary nodes is slower than expected or TPS is lower than expected; The IT investment of commercial banks was less than expected.
