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Introduction to Digital Yuan and Bitcoin

The digital renminbi (DCEP) is a digital version of renminbi researched and issued by the People's Bank of my country. It is positioned as M0 (that is, cash in circulation) and is the most liquid type of currency.

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Similarities and Differences Between Digital RMB and Bitcoin

Although they are both called digital currencies, there are many differences between digital RMB and Bitcoin:

1. In terms of the basic characteristics of the currency --- both are digital, and both accounts are loosely coupled, that is, transactions can be carried out without binding a bank account. The difference is that Bitcoin is completely decentralized and its total amount is limited, but digital RMB is not. In addition, according to the "Notice on Preventing Bitcoin Risks", in my country, Bitcoin is recognized as a virtual commodity and does not have the legal status of currency, while the digital renminbi is legal tender, and the digital renminbi is positioned as M0.

2 From the perspective of debt --- the issuer of the digital renminbi is the People's Bank of China, which has government credit endorsement and has unlimited legal repayment, while Bitcoin does not. Although both the digital renminbi and Bitcoin have no credit risk, the reasons are different: the digital renminbi has no credit risk because it is endorsed by the state, and Bitcoin has no credit risk because it is a non-credit currency.

3 In terms of operation --- the digital renminbi adopts a two-tier operating system. The central bank first exchanges the digital renminbi to commercial banks, and the commercial banks then distribute it to the public. Commercial banks need to pay 100% of the reserve to the central bank. The operation of Bitcoin relies on the entire ledger.

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Source: Okey Cloud Chain Research Institute

First large-scale test for the general public

Although there are endless news about the digital renminbi pilot, the Shenzhen digital currency red envelope pilot has received more attention and has a greater impact.

• The digital yuan is tested for ordinary people for the first time

This year, there have been news of digital renminbi pilots coming out one after another, such as the participation of the four major banks and the three major operators, the closed pilots in cities such as Shenzhen and Suzhou, and the cooperation between Meituan and Bilibili, etc., are all object-oriented. Small-scale groups such as internal employees, and this digital RMB red envelope pilot is the first large-scale test for ordinary people. Users can participate publicly through the "i Shenzhen" lottery. When making an appointment, they only need to be located in Shenzhen, and the activity threshold is low. The public can participate.

• The small retail scene is in line with the original intention of the digital renminbi

The face value of each digital RMB red envelope is 200 yuan, and it needs to be used by 3,389 merchants in Luohu District that have completed the transformation of the digital RMB system, which belongs to the small retail scenario. And other pilot news leaked before are all small retail scenarios, such as the distribution of transportation subsidies for employees of enterprises and institutions in Xiangcheng District, Suzhou, and the payment of party dues by internal employees of the Bank of China, etc., which is in line with the original intention of the digital renminbi design.

• Comply with the general environment that stimulates consumption and stimulates domestic demand

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As a digital currency, the digital renminbi issued by the central bank, like Bitcoin, has the characteristics of digitization, loose account coupling, and no credit risk. However, as a legal currency, the digital renminbi needs to find a balance between privacy protection and crime fighting. The feature of controlling anonymity is positioned as M0 and adopts a two-tier operation system.

Shenzhen’s digital renminbi red envelope pilot program complies with the general environment of stimulating consumption, and has chosen a small retail scenario, with low participation threshold and open activities. It is the first large-scale pilot program of digital renminbi for ordinary people. Compared with the previous pilots, the Shenzhen digital RMB red envelope test has made breakthroughs in both object-oriented and scale. Since 2014, the pace of digital RMB exploration has never stopped. With the continuous expansion and deepening of digital RMB test scenarios, it is believed that its It will be officially launched in the near future.