Innovation and Practice of Digital Renminbi in Banking

With the advent of the digital economy era, the rise of digital currencies has become a major trend in the development of the global financial industry. China, as a pioneer in the development of digital Renminbi, has made remarkable achievements

With the advent of the digital economy era, the rise of digital currencies has become a major trend in the development of the global financial industry. China, as a pioneer in the development of digital Renminbi, has made remarkable achievements. This article explores the innovation and practice of digital Renminbi in the banking industry by reviewing the 2023 annual reports of five listed banks: Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of China, China Construction Bank, and Postal Savings Bank of China.

Scenario Innovation

Bank of China:

• Scenarios such as public transportation, supermarkets, and elderly care, to enhance the convenience of public payment.

• Focus on public service industries such as government affairs, housing and construction, and electricity, to enhance digital service capabilities.

• Support for rural revitalization, through targeted subsidies, designated assistance, and inclusive loans powered by digital Renminbi smart contracts.

• Launch of "Clearance Pass" digital Renminbi settlement service for Shanghai Clearing House, to address the pain point of delayed transactions in bulk commodity trading.

• Rollout of "BAMBOO" digital Renminbi service brand for tourists visiting China, to facilitate cross-border payments.

• Active participation in the formulation of hard wallet standards, launch of industry-leading account-based hard wallet and various hard wallet products such as mobile Pay, SIM card, and employee card.

Agricultural Bank of China:

• Docking with government platforms to promote the application of digital Renminbi in non-tax payment, housing fund payment, and social security.

• Cooperation with key industry clients to realize functions such as digital Renminbi prepayment management and supply chain financing issuance.

• Promotion of digital Renminbi applications in the agricultural sector, establishing a closed loop of source capital issuance, targeted capital use, and payment and consumption applications.

• Upgrade of digital Renminbi functions for Huinongtong service points, exploration of rural governance point applications, and creation of "digital Renminbi demonstration villages".

Postal Savings Bank of China:

• Implementation of the nation's first "carbon emission reduction support tool + sustainable development linkage + digital Renminbi" loan, ensuring closed-loop capital flow and reliable loan usage.

• Enterprises can use digital Renminbi for subsequent payment and settlement without and service fees, with funds credited to accounts in real time, reducing funding costs and improving capital turnover efficiency.

Data Highlights

Industrial and Commercial Bank of China:

• Added 15.85 million digital Renminbi personal wallets and 1.34 million corporate wallets.

• Added 2.71 million digital Renminbi merchant stores.

China Construction Bank:

• 51.57 billion yuan in taxes paid using digital Renminbi, and 361 million yuan in housing funds paid.

• 789 million yuan in financial products purchased using digital Renminbi.

• Promotion of interconnection between digital Renminbi personal wallets and electronic payment tools, with a total of 70.75 million red envelopes issued, amounting to 693 million yuan, driving 17.55 million consumer transactions worth 1.25 billion yuan.

• Ranked first in the industry in terms of monthly active corporate wallets and cumulative number of consumer transactions.

Digital Renminbi, as an emerging technology, brings new opportunities and challenges to the banking industry. Listed banks such as Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of China, China Construction Bank, and Postal Savings Bank of China are actively exploring innovative applications of digital Renminbi, and have made remarkable progress in scenario innovation and data accumulation. With the continuous improvement of the digital Renminbi ecosystem, it will play an increasingly important role in the national economy and financial industry, driving the development of the financial industry towards greater digitization, intelligence, and inclusiveness.