Do you prefer digital 'red envelopes'? - Chinadaily.com.cn - China Daily

Parents successful Fuzhou, Fujian province, person integer hongbao from their son. [Photo/Xinhua]

Spring Festival is simply a peculiar occasions for children besides due to the fact that they person reddish envelopes (hongbao) from elders connected the occasion. While successful the past, children utilized to rejoice aft receiving hongbao from elders successful person, nowadays they mostly person them online acknowledgment to the advent of mobile outgo apps specified arsenic Alipay and WeChat, which prompted the cardinal slope to make a caller ineligible tender for online transactions.

That's however the integer renminbi came into being. The integer currency has accrued the types of negotiable instruments issued by the cardinal slope and diversified the outgo tools. Yet the promotion and exertion of the integer renminbi faces immoderate challenges, particularly due to the fact that it is yet to beryllium recognized nationwide.

First, acknowledgment to their duopoly, Alipay and WeChat relationship for astir 95 percent of the mobile outgo market. Based connected these outgo apps, a implicit user exertion ecosystem has been established covering activities specified arsenic shopping, traveling, giving reddish envelopes, making payments, and investing funds. In the abbreviated term, however, the "digital renminbi wallet" tin hardly shingle the existing outgo and transaction ecosystem.

Second, payments made done the integer renminbi are not channeled done slope accounts. Instead, they are deposited straight into "digital accounts" and transactions tin beryllium completed done an physics device, which whitethorn origin users to interest astir the information of their deposits, peculiarly due to the fact that if a idiosyncratic loses his oregon her compartment phone, he/she could suffer a batch of money.

Third, the integer renminbi whitethorn beryllium a substitute for cash, but the nationalist is not attracted to it due to the fact that it has nary appreciation value. While radical tin gain involvement connected slope deposits, nary involvement is offered connected integer renminbi deposits.

In fact, the archetypal plan of the integer renminbi was for retail — to marque transactions much convenient for buyers and sellers, oregon consumers and merchants. The cardinal bank, too, has said each the probe and improvement is to guarantee the integer currency replaces M0, which shows its purpose is to usage it for retail, particularly to marque beingness much convenient for the nationalist with the assistance of the net and mobile apps.

First, the promotion of the integer renminbi volition not shingle up the ecosystem based connected the established mobile outgo methods, but it volition decidedly amended the existing competitory situation successful the e-payment market. Systemic betterment and innovation could assistance trim monopoly superior successful the market.

For example, fixed the existing strategy of physics payment, radical could confuse betwixt outgo tools and concern tools, and the cardinal slope cannot entree the afloat outgo information which could effect successful definite companies establishing monopoly connected data.

Besides, physics outgo has immoderate inherent defects. The physics outgo services provided by antithetic institutions are not compatible, creating inconvenience for users. This occupation has, to a ample extent, been solved by the cardinal slope issuing ineligible integer currency.

Major commercialized banks person carried retired interior investigating of the integer renminbi, and arsenic fiscal institutions, Alipay and WeChat are eligible to circulate integer currencies. So it is apt that with expanding opportunities to usage the integer currencies, the integer renminbi could marque a quality successful the existing outgo ecosystem successful the foreseeable future.

Second, the integer renminbi issued by the cardinal slope is China's ineligible integer currency, which is reliable. It afloat respects the privateness and protects idiosyncratic information, and is designed to forestall risks and has unlimited ineligible tender. In contrast, mobile outgo platforms specified arsenic Alipay and WeChat are settled by commercialized slope deposits, which are fundamentally extended functions of a slope account.

But nary substance which method we choose, determination is ever a hazard of wealth nonaccomplishment owed to nonaccomplishment of a device, accusation leakage, web fraud and different factors. But by utilizing a distributed bookkeeping method that is anonymous and controllable, the integer renminbi has large advantages successful protecting privacy.

For instance, it prevents counterparties from tracking idiosyncratic depletion records and protects idiosyncratic privateness portion meticulously signaling each superior transaction, making it easier for cardinal slope regulators to ace down connected amerciable activities to trim the nonaccomplishment of users' money.

Finally, the integer renminbi has autarkic circulation worth and tin supply antithetic outgo options for antithetic users. Positioned to beryllium an alternate to M0, the integer renminbi is signifier of ineligible tender and a nationalist merchandise provided by the cardinal bank.

True, the cardinal slope doesn't wage immoderate involvement connected integer renminbi deposits, but it does not complaint immoderate fees for services specified arsenic speech and circulation either. For users engaged successful commercialized operations, this saves the outgo of handling fees. For individuals, it saves them from paying immoderate charges for withdrawing funds. As a axenic nationalist work product, the integer renminbi provides issuance and circulation services for nine and frankincense has large nationalist payment value.

And arsenic a instrumentality that tin conscionable the needs of the nationalist successful galore fields, it is apt to beryllium wide utilized successful the future.

With the Chinese Lunar New Year astir the corner, the issuing of hongbao volition stitchery gait and boost the improvement of the integer renminbi and connection the nationalist a much convenient outgo instrument. Mobile outgo exertion has had a profound interaction connected our lives, and the integer renminbi is apt to alteration the mode nine does business. This integer gyration is the effect of putting the "digital civilization" mentation into signifier and volition marque beingness much convenient for the people.

The writer is enforcement dean of Institute of Blockchain, Renmin University of China. The views don't needfully correspond those of China Daily.

The views don't needfully bespeak those of China Daily.

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