国际治理创新中心-数字人民币：在数字经济中重新确立数据控制的可能途径（英）-2021.11-10页_110kb

Summary of Policy Brief No. 169 – November 2021: Digital RMB – A Possible Way to Reassert Data Control in the Digital Economy

Core Content

The Policy Brief discusses the potential of China's Digital Currency Electronic Payment (DC/EP), also known as e-CNY, to enhance the central bank's control over big data in the financial system and to regulate the power of fintech giants. It outlines the implications of digital RMB in terms of data security, financial stability, and global CBDC competition.

Main Motivations and Goals

• Reassert Central Bank Control: The digital RMB is designed to enable the People's Bank of China (PBoC) to have full visibility and control over transaction data and user information, thereby reducing the influence of third-party payment platforms like Alipay and WeChat Pay.
• Data Protection and Regulation: By centralizing data management, the PBoC can better monitor and regulate financial transactions, enhancing personal information and data protection.
• Complement to Existing Systems: Digital RMB is not intended to replace existing financial instruments such as bank deposits or credit systems, but rather to complement them and support the existing monetary payment structure.
• Global CBDC Competition: The issuance of digital RMB is a strategic move to position China in the global CBDC landscape and to counter the rise of cryptocurrencies and other CBDCs.

Key Features of the Digital RMB

• Two-Tiered Structure: The PBoC issues digital yuan to commercial banks, which then distribute it to the public. This structure ensures that the central bank maintains control over the issuance and circulation.
• Controllable Anonymity: Users can have varying levels of anonymity depending on the amount of digital yuan in their wallet. Larger wallets are less anonymous, while smaller ones can be more private.
• Offline Transactions: The digital RMB supports offline payments through technologies like near-field communication (NFC), making it accessible even in areas with limited internet access.
• Fiat Currency Status: Unlike cryptocurrencies, the digital RMB is a fiat currency and is backed by the state, which enhances its credibility and utility in financial systems.

Current Use and Impact

• Domestic Retail Focus: At present, the digital RMB is primarily used to replace cash (M0) and is not expected to significantly impact Alipay or WeChat Pay.
• Limited Financial System Impact: It is not intended to replace short- and long-term deposits (M1 and M2) or to disrupt existing interbank payment systems.
• Regulatory Compliance: The PBoC requires second-tier institutions to comply with anti-money laundering (AML), know-your-customer (KYC), and data privacy regulations.

Potential Future Development

• Expansion into Financial System: There is a possibility that the digital RMB could eventually replace bank deposits and be used for loan issuance and bond purchases.
• Unified Digital Infrastructure: The PBoC aims to establish a unified digital payment system that supports all financial transactions, ensuring centralized data control.
• Strategic Move for CBDC Leadership: The digital RMB is seen as a pre-emptive step in the global CBDC race, allowing China to shape the rules and standards for future cross-border payments and financial technologies.

Global CBDC Competition and Precautionary Measures

• Prevent Cryptocurrency Influence: The PBoC aims to counter the potential threat from cryptocurrencies like Bitcoin and Facebook's Libra by maintaining a centralized digital currency system.
• Strategic Positioning: China is actively monitoring and engaging with other central banks' digital currency initiatives, such as Singapore's Project Ubin, Canada's Project Jasper, and the European Central Bank and Bank of Japan's Project Stella.
• Rulemaking Leadership: The PBoC is positioning itself to lead in the development of global CBDC rules, particularly in the area of cross-border payments.

Legal and Regulatory Context

• Data Security Law (2021): This law enables the Chinese government to tighten control over data collected by big tech firms, defining "core state data" and imposing compliance requirements.
• Personal Information Protection Law (2021): This law mandates that internet platforms must protect user data and not use coercive measures to obtain or utilize personal information.

Conclusion

The digital RMB is a significant step in China's digital economy strategy, aimed at reasserting central bank control over financial data and enhancing regulatory oversight. While it is currently focused on domestic retail transactions, its potential future expansion could have broader implications for the financial system and global CBDC competition. The PBoC is also taking proactive measures to safeguard its currency sovereignty and financial stability in the face of emerging digital financial technologies.