How to understand ＂account-based, charging mode＂ digital RMB？

Author: She Yunfeng

Source: Mobile Payment Network

Not long ago, Zhou Xiaochuan, vice chairman of Boao Forum for Asia, expressed several views on the development of digital RMB at the 2023 China Digital Finance Forum, two of which were very constructive and forward-looking.

Digital RMB is mainly based on account type.

Zhou Xiaochuan believes that the development of digital RMB is mainly based on account-based digital currency. In other words, token-based digital currency is a path that may have room for development, but the mainstream is account-based digital currency.

How to understand it? In fact, this is in great agreement with the current supervision on the path of promoting digital RMB.

The mobile payment network once published an article discussing the choice of digital RMB in the wallet path "Upgrade from value mode to account mode, and dual offline of digital RMB is not mainstream". We think that with the pilot implementation of digital RMB, account mode and quasi-account mode will become the mainstream in the future, and the value mode is only a supplement.

As we all know, digital RMB is compatible with three ways: account-based, quasi-account-based and value-based, and adopts variable denomination design to realize value transfer in the form of encrypted currency strings. Judging from the manifestations of digital RMB hard wallet, the quasi-account model is the mainstream at present, and the account model has also taken shape. Although the value model has technical conditions, there are still some problems in its real implementation.

Zhou Xiaochuan said that the choice of account type and token type is also closely related to the choice of centralized route. In the management mode, digital RMB needs to adhere to the two-tier operation system and centralized management concept.

Why should we adhere to the centralized management concept? Yi Gang, the former governor of the central bank, once said that because the digital currency of the central bank is the debt of the central bank to the public, it is necessary to ensure and strengthen the macro-prudential and monetary policy regulation functions of the central bank and maintain the original transmission mode of monetary policy.

In the two-tier operation structure, the first layer is centralized management, which is similar to that the central bank must know how much circulating cash it has issued and how much digital currency it has issued. The transfer and transaction activities between customers are on the second floor, and a large amount of customer information is stored on the second floor, that is, industry, agriculture, China, construction, communication or WeChat Alipay. They are obliged to be responsible for privacy protection, anti-money laundering and anti-terrorism financing, and only report the necessary information to the People’s Bank of China.

From this perspective, account-based centralized management is a necessary condition, and the central bank must have the right to manage the digital RMB as a whole. However, if a large number of token-based digital RMB with value model are adopted, the central bank will have a blank window for its management, which has certain security risks. Therefore, before the official launch, such security issues must be controlled to a minimum, and the value model digital RMB that is not under the management of the central bank after the official launch needs to be controlled within a certain range.

Therefore, quasi-account and account-mode wallets are all manifestations of account-based digital RMB, which will be the main development direction of digital RMB in the future. As a token-based development path, value mode still needs to be explored as a supplementary form.

The price system needs to be set under the two-tier operation

Zhou Xiaochuan believes that under the two-tier operation system, policy-making should make the digital payment system survive independently, and a price system should be set up so that the digital payment system can charge for services. In fact, the rate can be very low and the impact on customers is quite small. If there is no charging mechanism, it will lead to cross-subsidies and cross-sales, and payment system service providers will focus on other aspects that should not be paid attention to.

Digital RMB adopts a two-tier operation system, one of the important reasons is to mobilize the enthusiasm of market institutions such as commercial banks to the greatest extent. The central bank issues digital RMB, but not directly to residents and corporate customers. Instead, it issues digital RMB to operating institutions, which serve customers directly as operators.

Yi Gang once wrote that the two-tier operation is conducive to making full use of the existing resources, talents, technology and other advantages of commercial organizations, and promoting innovation and competition through market-driven. In terms of business resources, commercial banks and technology companies have mature IT facilities and huge user base. In terms of human resources, commercial banks and technology companies also have sufficient talent reserves. The central bank mainly carries out top-level design, as well as legal norms and regulatory standards. After the top-level structure, legal norms and regulatory requirements are designed, services are handed over to the market to play a decisive role in the allocation of resources by the market. Two-tier operation helps to spread risks. The central bank does not presuppose the technical path and remains open. Different institutions can explore different technical paths and realize system optimization through competition.

However, in the pilot stage, the design of such optimal allocation of resources seems to have a big gap with the market development, and the most important reason is the "incentive mechanism" problem.

At present, the core of the two-tier operation system is the operation organization, which has the largest investment in personnel and property and the highest cost, but has no direct income. The operation of digital RMB has become a way for operating institutions to obtain customers, which is not conducive to the promotion and development in the later period.

The characteristic of digital RMB payment is settlement, which is indeed conducive to the efficient realization of the payment process, but it also reduces the participation of the payment process and even cuts off the interest rate acquisition space.

As a large number of participants in the 2.5-tier, it has a high degree of overlap with the 2-tier institutions in the non-operational work of digital RMB. At present, the 10 operating institutions are commercial banks themselves, and they have a certain competitive relationship with the 2.5-tier commercial banks in terms of business and customer base. The 2-tier institutions have squeezed the 2.5-tier business space by virtue of their roles as wallet brands and operating institutions, which seems to affect the enthusiasm of small and medium-sized banks in the pilot process.

At present, there are more and more institutions participating in the pilot project of digital RMB. The 2.5-tier institutions lack clear and standardized roles, division of responsibilities and information protection, and there is no profit point. The participation enthusiasm of the 2.5-tier institutions in most pilot areas is very limited.

Therefore, in the view of mobile payment network, under the two-tier operation system, the sustainable development of digital RMB in the future can not be separated from the perfect "business model", on the one hand, it lies in the cooperation between various institutions at different levels, on the other hand, it lies in the respective functions of different institutions and the income points under their participation.

tag

As for whether "charging" will affect the "zero handling fee" feature of digital RMB, in fact, users can rest assured that the exchange and redemption of digital RMB will be "zero handling fee" for both users and merchants now and in the future. However, after the future business model is perfected, it is unclear whether the rate income of institutions will be passed on to users and merchants under the price system!