Application scenarios continue to expand the digital renminbi “Tiger Vision” Winter Olympics
The Year of the Tiger is approaching, and the Beijing Winter Olympics will follow. Recently, digital yuan pilot application scenarios have continued to expand, and the number of digital yuan apps that have been online for less than a month has continued to rise in the application markets of many mainstream mobile phone brands.
According to the Securities Times reporter's statistics, at the time of publication on January 28,The total number of downloads in the Huawei app market is 1.35 million, the vivo app market has a cumulative total of 10.68 million downloads, the Xiaomi app market has a cumulative total of 5.07 million downloads, and the OPPO app market has 1.78 million downloads. The total number of downloads from the 4 stores has exceeded 30 million times.
What is behind this set of data can be seen as the rapid implementation of the digital yuan in the consumer pilot scenario. From an industrial perspective, the Anxin Securities Research Report even bluntly stated that, based on estimates of commercial banking infrastructure and system transformation alone, the entire digital yuan transformation is expected to drive a total investment scale of 116.5 billion yuan.
Listed companies with a digital currency concept have also become the focus of investors' attention. According to the reporter's statistics, in the past three months, investors asked 861 questions about digital yuan on the Shenzhen Stock Exchange interactive platform, and the Shanghai Stock Exchange e-Interactive also had more than 100 questions about digital yuan.
In terms of the secondary market, Wind data shows that in the past three months,The highest increase in the digital currency index was over 36%.Despite market adjustments in recent days, the cumulative increase of the index was as high as 21%. In terms of individual stocks, the cumulative increase of New Cape was more than 91%, the cumulative increase of Hengbao shares was 51%, and the cumulative increase of Xindu, Hai Lian Jinhui, and Yingshisheng all exceeded 30%.
However, there are also industry insiders who have indicated the risks of digital currency concept stocks. “The rise in the digital currency sector has mainly benefited from the digital yuan. The digital yuan is about to enter the full implementation stage. It is expected that the Winter Olympics will be the last round of piloting new scenarios, and the full implementation is also expected to change the current payment industry format, increasing the room for imagination about performance in related sectors, thus driving up stocks.” Pan He Lin, executive dean of the Institute of Digital Economics at Zhongnan University of Economics and Law, told reporters, “Investors should pay attention to the risks of individual stocks that rose a lot in the early period.”
Fast implementation of application scenarios
As the countdown to the opening ceremony of the Beijing Winter Olympics enters and the Spring Festival in the Year of the Tiger approaches, there is frequent news that digital yuan is rapidly being implemented in pilot application scenarios.
On January 18, the State Information Office held a press conference on 2021 financial statistics and revealed a set of data.As of December 31, 2021, more than 8.0851 million digital yuan pilot scenarios have been opened, and 261 million personal wallets have been opened, with a transaction amount of 87.565 billion yuan. The pilot has effectively verified the digital yuan business technical design and system stability, product ease of use and scenario applicability, and enhanced the public's understanding of the digital yuan design concept.
This means that since 2021, the construction of the digital yuan scenario has accelerated, and online and offline expansion has continued. According to information, at present, the People's Bank of China has launched digital renminbi pilot projects in Shenzhen, Suzhou, Xiong'an, Chengdu, Shanghai, Hainan, Changsha, Xi'an, Qingdao, Dalian, etc., and the 2022 Beijing Winter Olympics scenario, which basically covers different regions such as the Yangtze River Delta, Pearl River Delta, Beijing-Tianjin-Hebei, central, western, northeast, and northwest China.
It is worth mentioning that the Winter Olympics will be a new opportunity for the full promotion of digital yuan. The Guotai Junan Research Report believes that with the Winter Olympics approaching, digital currency may be further catalyzed. The digital yuan Winter Olympics scenario pilot will focus on areas within the Winter Olympics security red line, with the main goal of safeguarding and facilitating payment choices for domestic and foreign consumers. In addition to mobile app wallets, foreign consumers can also use digital yuan hardware wallets. This large-scale pilot is expected to be an opportunity to fully promote digital yuan.
However, the current implementation of the digital yuan in the Beijing Winter Olympics scene can be described as having many highlights. On January 26, the reporter learned from the Beijing Financial Supervisory Authority thatBy the end of 2021, Beijing had opened more than 12 million digital renminbi personal wallets and more than 1.3 million public wallets, covering more than 400,000 Winter Olympics scenarios such as food, lodging, travel, shopping, entertainment, and medicine, with a transaction amount of 9.6 billion yuan.
Zhou Maohua, a macro researcher at the Financial Markets Department of Everbright Bank, told the Securities Times reporter that digital yuan application scenarios are constantly expanding, mainly because digital yuan technology continues to mature, and related infrastructure is also being continuously improved, laying a solid foundation for the promotion of digital yuan application scenarios. At the same time, speeding up the promotion of digital yuan objectively requires that digital yuan continue to enrich application scenarios, so that people can use it and actually experience the digital yuan usage experience.
The user experience of this pilot scenario is also reflected in local life and e-commerce consumption platforms. On January 26, Meituan announced that it will open digital yuan payment channels for all offline consumption scenarios of the platform, including more than 200 offline consumption scenarios on the Meituan platform, including restaurants, takeout, and fresh food retail.Recently, the JD app has also added a new online consumption scenario. Users can experience the use of a digital yuan “hardware wallet” to pay with one sticker. Previously, JD had already enabled third party merchants to connect to the digital yuan system.
On the other hand, along with the continuous expansion of digital yuan application scenarios, the number of digital yuan app downloads also continues to rise.
On January 4 of this year, the digital yuan app was launched in major app stores. Currently, less than a month has passed, and the number of digital yuan app downloads in the app market for many mainstream mobile phone brands has achieved an important breakthrough. According to the reporter's statistics,As of January 28, the Huawei app market had accumulated 13.05 million downloads; the vivo app market had a cumulative total of 10.68 million downloads; the Xiaomi app market had a cumulative total of 5.07 million downloads; the OPPO app market had a cumulative total of 1.78 million downloads, and the total number of downloads from the four stores had exceeded 30 million.
Pan Helin told the Securities Times reporter that the time point for the full implementation of digital yuan is approaching. In particular, the digital yuan app was launched in major application stores. Although it is still being piloted, it is clear that the digital yuan pilot is nearing its end. The digital yuan is being combined with application scenarios. On the one hand, it provides more practical experience for the full implementation of digital yuan in the future, and on the other hand, it is also first popularized in pilot regions through a combination of application scenarios.
Broad application prospects
The digital yuan is a digital legal tender issued by the People's Bank of China, and the significance of China's development of digital currency is self-evident.
According to Zhou Maohua, according to the central bank's statement, the digital yuan will mainly replace M0 in the coming period, that is, the digitization of banknotes in circulation; it is also expected that digital yuan and banknotes will coexist for a long period of time. “The development of digital yuan is mainly in line with the intrinsic needs of the domestic digital economy; avoiding lack of currency issuance rights; at the same time, improving economic efficiency and giving full play to the inclusive characteristics of digital currencies. Digital yuan has the advantages of being green, safe and reliable, convenient and fast, reducing transaction costs, improving transaction efficiency, and helping prevent money laundering.”
“The purpose of the digital yuan is mainly to resume some cash transactions.” Pan Helin said, “Objectively, in the future, there will also be considerations of internationalizing the RMB, and there will also be considerations of combining it with new scenarios to expand the use of payment functions in new scenarios. However, at this stage, it is mainly restoring some cash transaction functions, because in the digital age, the amount of cash used is insufficient due to the decline in the convenience of cash.”
Although digital yuan is developing rapidly within the scope of the pilot, some industry insiders believe that compared to traditional electronic payment methods, the overall share of digital yuan payments is relatively small, and the dependence formed by traditional payment methods may limit the promotion of digital yuan.
Li Lihui, head of the blockchain research team of the China Internet Finance Association and former governor of the Bank of China, publicly stated that judging from the scale of transactions, the digital yuan market is still relatively small, and the current scope of application is still very limited, which also shows that the future application prospects of digital yuan are very broad.“To fully reflect its social and economic value, the digital yuan must be scaled up. There are two prerequisites for scaling up: one is that the underlying technology meets the standards, and the other is that application scenarios are popularized.”
“Determining the success or failure of digital yuan mainly includes two major aspects. Security is achieved through technology accumulation, and convenience is achieved through scenario integration and open interfaces.” Pan He Lin said, “Security includes both anonymity and controllability, such as scenario transactions, and anonymity to protect personal information. Another point is convenience, including the ease of use for users, especially the convenience brought by the integration of many scenarios, as well as the convenience of scenario access. The digital yuan payment function should be open and should not be limited to existing scenarios.”
On the technical side, Pan He Lin also believes that the technical layout related to the digital yuan should be based on the long term. “Since the digital yuan is officially implemented, it is difficult to adjust the transaction rules in reverse, so the technical aspects must be settled once and for all, and the technical layout must be based on the long term. In the pilot regions, with the launch of the digital yuan app, the scope of the pilot area will be expanded as soon as possible to allow more people to participate in the pilot. At the same time, it is also a test at the technical level to see the carrying capacity of the digital yuan to handle payments.”
Zhou Maohua pointed out that in the future, digital yuan technology should be continuously improved. People will continue to have rich experiences in terms of safety, efficiency, and convenience in using digital yuan, and the depth and breadth of application scenarios will increase accordingly. “Considering innovations in the digital yuan scenario, the application scenarios covered by the digital yuan will cover the range of application scenarios for banknotes. Increase the dissemination of digital yuan knowledge, continuously improve technology, encourage merchants to innovate application scenarios and enhance user experience; at the same time, strengthen digital yuan anti-counterfeiting supervision.”
In fact, the government also indicated the direction for the next development of the digital yuan. Zou Lan, director of the Financial Markets Department of the People's Bank of China, publicly stated recently that the next step is to steadily advance digital yuan R&D pilot projects, further deepen the pilot use of digital yuan in retail transactions, living expenses, government services, etc., and base the digital yuan R&D pilot on serving the real economy and people's lives, so that more enterprises and individuals can feel the value of digital yuan and fully stimulate the enthusiasm of all parties in the industry.
Investors' Focus
With the digital yuan pilot and the continuous deepening of the scenario, related fields will usher in an industrial revolution, and investment opportunities in the secondary market will also attract great attention from the market.
According to the reporter's statistics, in the past 3 months, investors have asked 861 questions about digital yuan on the Shenzhen Stock Exchange interactive platform, and the Shanghai Securities e-Interactive has also had more than 100 questions about digital yuan. The popularity of digital yuan can be seen.
Looking at the secondary market, the digital currency sector has seen the highest increase in recent times. According to Wind data, the highest increase in the digital currency index in the past 3 months was over 36%. Although it has experienced general market adjustments in recent days, the cumulative increase of the index has also reached 21%. In terms of individual stocks, the cumulative increase of New Cape was more than 90%, the cumulative increase of Hengbao shares was 51%, and the cumulative increase of Xindu, Hai Lian Jinhui, and WinTime Sheng all exceeded 30%.
According to Zhou Maohua, the rise in the digital currency sector is mainly due to the market's expectation that the promotion of the digital yuan will accelerate. “Currently, domestic digital yuan is also being used on a pilot basis. It is expected that after applying the Winter Olympics scenario, the digital yuan will enter a full promotion period. And the market is optimistic that the promotion of digital yuan will benefit enterprises in their upstream and downstream industrial chains.”
It is worth noting that the digital currency industry chain is long, and the industry generally believes that the promotion and construction process involves industries such as system construction, software and hardware wallets, payment collection, and secure encryption. Some brokerage firms even predict that it will drive more than 100 billion yuan to invest in related fields.
According to the Anxin Securities Research Report, the digital yuan industry includes bank-side system transformation companies, financial equipment companies, aggregation payment vendors, cryptographic algorithm providers, and companies related to application scenarios.“We estimate from the commercial bank side infrastructure and system transformation alone. The overall digital yuan transformation is expected to drive a total investment scale of 116.5 billion yuan, including the ATM transformation market of 50.7 billion yuan, the smart teller machine market of 11.4 billion yuan, the POS transformation market of 19.2 billion yuan, the hard wallet market of 33.9 billion yuan, and the bank IT system transformation market of 1.3 billion yuan.”
“The biggest change in digital yuan involves all aspects of payment. At the same time, digital yuan involves the transformation and upgrading of all aspects of the banking system to support the development of related payment services.” Shen Bo, assistant president of Yuxin Technology and general manager of the R&D center, said in an interview with a reporter from the Securities Times · e Company.
According to Shen Bo, the digital yuan involves four major aspects:1. The central bank is responsible for the issuance process; 2. Nine banking institutions are responsible for the digital yuan operation process; 3. Cooperative operators include commercial banks and non-bank payment institutions; 4.
The transformation of related industries has also brought certain development opportunities to relevant listed companies. Take Yuxin Technology as an example. The company recently revealed on an interactive platform that Yuxin Technology is positioned as an application software developer. It has participated in the second, third, and fourth sessions of the digital yuan in the past two or three years, and has participated more deeply in the second and third stages in particular.
Shen Bo also revealed to reporters that Yuxin Technology has its own unique advantages in the development of digital yuan, including the company's deep participation in the digital yuan operation and construction of several major banks, and has begun to help several small and medium-sized banks provide solutions on the access side and payment side. The company will further integrate resources in 2022, and will increase digital yuan solution research and product development in various business lines.
In addition to bank IT system transformation, industries such as hardware equipment and digital encryption have also attracted investors' attention.
In terms of financial equipment, Radio and Television Express said on an interactive platform on January 27 that the company's digital yuan smart teller machine supports various functions such as opening personal digital wallets, issuing hard wallets, and depositing and withdrawing funds. Among them, digital yuan hard wallets are mainly physical cards and support dual offline payments. The usage method is similar to bus cards, making them easy to use for the elderly and children who cannot carry mobile phones.
In terms of data encryption, Xin'an Century recently stated on an interactive platform that digital currency is one of many application scenarios for banks. The company's products are all suitable for protecting the security of digital currencies. Currently, information such as the Bank of Beijing's digital currency project signature server can be found on the public tender website.
“The digital yuan is positioned as an alternative to M0. Currently, the pilot scenario is still expanding. The future impact on the entire commercial ecosystem remains to be seen, but from an industrial chain perspective, with the digital yuan pilot and steady deployment, it will benefit the digital yuan upstream and downstream industry chains, such as digital authentication, encryption technology, system transformation, and payment transaction terminal equipment.” Zhou Maohua told reporters.
