Event: according to the official website of the people’s Bank of China, on March 31, the people’s Bank of China held a symposium on the pilot work of digital RMB research and development, summarized the pilot work of early research and development, and arranged and deployed the work of the next stage. Yi Gang, President of the people’s Bank of China, and fan Yifei, vice president of the people’s Bank of China, attended and addressed the meeting.
After the Winter Olympic Games, it is proposed to host two pilot cities in Guangdong Province, Fuzhou, Zhejiang Province, and Huzhou City of Zhejiang Province, and Huzhou City of Zhejiang Province, as well as the 2026 Asian Paralympic Games.
The number of pilot cities has reached 23. In April 2020, the people’s Bank of China announced the first batch of four digital RMB pilot areas: Suzhou, Chengdu, Shenzhen and xiong’an. In October 2020, the people’s Bank of China announced the new pilot areas: Shanghai, Hainan, Changsha, Xi’an, Qingdao, Dalian and other places and the scenes of the 2022 Beijing Winter Olympics. As of April 2022, the number of pilot areas for digital RMB has reached 23.
The central government supports and the people’s Bank of China attaches importance to clearing the obstacles for the implementation of digital RMB. We believe that the current obstacles to the landing of digital RMB have been completely cleared. First, the central government supports: 1) in October 2020, the general office of the CPC Central Committee and the general office of the State Council expressed their support for the R & D and application of digital RMB for the first time; 2) In March 2022, the 70th chairman meeting of the 13th National Committee of the Chinese people’s Political Consultative Conference collectively studied digital currency, and Mu Changchun, director of the digital currency Research Institute of the people’s Bank of China, was invited to report. Secondly, as the issuer of digital RMB, the people’s Bank of China attaches great importance to the pilot work of digital RMB: 1) hold a Symposium; 2) Since 2020, it has expressed its support for digital RMB at the video conference on currency, gold and silver and security for many consecutive years; 3) On February 8, 2022, 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 plan” for the development of financial standardization, proposing to steadily promote the development of legal digital currency standards. We believe that the landing of digital RMB is no longer a “test”, but has more and more long-term institutional guarantee.
Rebuild a set of electronic payment system and reconstruct the industrial chain. We believe that the significance of digital RMB lies in the construction of a new electronic payment system. Specifically, this includes: 1. New account system: the digital RMB account system is different from the current account classification system of bank cards; 2, the new operation system: 1) the new operation organization / distribution organization: only six state-owned commercial banks, China Merchants Bank Co.Ltd(600036) , network business bank (Alipay) and micro public bank (WeChat payment) and other institutions; 2) New clearing institution: without the direct participation of UnionPay and online Federation, the clearing work is undertaken by the digital currency Research Institute of the central bank; 3) Charging policy for new merchants: currently free; 4) New consumer subsidy means: joint local governments, with the help of government funds, etc; 3. New software and hardware system: Hardware wallet. Different from some market views, the birth of digital RMB only comes from regulatory needs, and there is no market demand. We believe that based on some characteristics of digital RMB, it is expected to “take root” in China’s electronic payment system for a long time, reconstruct the interest chain of electronic payment, and reduce payment service fees for small and medium-sized merchants.
Investment suggestion: as of December 31, 2021, China’s digital RMB pilot scenarios have exceeded 8.0851 million, 261 million personal wallets have been opened, and the transaction amount is 87.565 billion yuan. We are optimistic about the opportunities that digital RMB may bring to relevant institutions by reconstructing China’s electronic payment industry chain. Suggestions: 1. Bank acquiring service providers: card transfer, Lakala Payment Co.Ltd(300773) , Newland Digital Technology Co.Ltd(000997) etc; 2. Financial IT / banking service providers: Sinodata Co.Ltd(002657) , Shenzhen Forms Syntron Information Co.Ltd(300468) , Northking Information Technology Co.Ltd(002987) , etc; 3. Security chip company: Unigroup Guoxin Microelectronics Co.Ltd(002049) , Huada electronics, etc; 4. Card dealer: Hengbao Co.Ltd(002104) , Chutian Dragon Co.Ltd(003040) , Wuhan Tianyu Information Industry Co.Ltd(300205) , etc.
Risk tip: the operation mode of digital RMB needs to be verified, and the promotion progress of digital RMB is less than expected.
