Securities Times Two Sessions Reporting Group
With the vigorous development of network technology and the digital economy, the public's demands for convenience, security, inclusiveness, and privacy in retail payment are increasing day by day.
Central banks or monetary authorities in many countries and regions closely track the development of financial technology and actively explore the digital form of legal tender.
In July 2021, the Digital RMB R&D Working Group of the People's Bank of China released the "White Paper on the Research and Development Progress of China's Digital RMB", which clarified the basic position of the People's Bank of China on the research and development of digital RMB, and explained the research and development background, goals, vision and design of the digital RMB system. Framework and related policy considerations.
Legal digital currency has moved from theory to reality.
However, at present, the digital renminbi is not regulated at the level of laws and regulations, and there is a lack of legal protection in the acquisition, use, and risk prevention and control of digital renminbi.
During the National Two Sessions in 2022, a number of representatives mentioned proposals for legislation on digital renminbi.
Legal attributes of digital renminbi
need further clarification
At present, the accurate definition of digital renminbi mainly refers to the content of the "White Paper".
The definition of digital renminbi in the "White Paper" is a digital form of legal tender issued by the People's Bank of China. It is operated by designated operating agencies. It is based on a generalized account system and supports the loosely coupled function of bank accounts. It is equivalent to physical renminbi, and has value characteristics and Legal compensation.
Wang Jingwu, deputy to the National People's Congress, vice president and chief risk officer of the Industrial and Commercial Bank of China, said that according to this definition, the digital renminbi is a liability of the People's Bank of China to the public, supported by national credit, but its legal compensation lacks legal provisions.
At present, Article 16 of the Law of the People's Republic of China on the People's Bank of China stipulates that the legal tender of the People's Republic of China is RMB.
Article 2 of the Regulations on the Administration of Renminbi stipulates that the Renminbi includes two forms of coins and banknotes, and does not reflect the digital form of the Renminbi.
Wang Jingwu put forward suggestions on the improvement of digital renminbi-related laws from the aspects of the legal attributes of digital renminbi, the legal status of each participant, the legal status of digital renminbi carriers, and smart contracts.
First, the legal attributes of digital renminbi need to be further clarified.
Second, the digital renminbi operating mechanism, the legal status, rights and obligations of each participant need to be further clarified.
The digital renminbi operates in the way of operating institutions, involving multiple parties such as the People's Bank of China, operating institutions, participating institutions, and users, which is completely different from the issuance of banknotes and coins.
The legal status, rights and obligations of various institutions in the operation of digital renminbi need to be further clarified by laws or regulations to ensure the stable operation of digital renminbi.
Third, the legal status of the digital renminbi carrier needs to be confirmed.
The use of digital renminbi cannot be separated from the digital renminbi wallet, and the wallet needs to be opened in the operating agency. The difference between the wallet system and the account system is not only related to the choice of citizens to use digital renminbi or account funds, but also related to the reform and innovation of banking business. Establishment of risk prevention and control mechanisms.
Fourth, the use of digital RMB smart contracts needs to be clarified.
The digital renminbi has programmability, which is realized by loading smart contracts. Who has the right to load contracts, change contracts, and how to load and change them needs to be regulated and guaranteed by specific legal provisions.
Fifth, the boundaries of privacy protection in digital RMB still need to be defined.
The "White Paper" points out that the digital renminbi has controllable anonymity and follows the principle of "small amount of anonymity and large amount of legal traceability".
The digital renminbi adopts a centralized management and two-tier operation model.
The People's Bank of China can track the entire chain from issuance to circulation, and operating agencies can also track the circulation chain to a certain extent. Technically, there is no problem of anonymity. Legal regulations are required to use technical means to trace transactions. .
prominent legal status
Strengthen the responsibility of the main body of supervision
The Central China Democratic National Construction Association stated in the proposal submitted by the two sessions this year that the digital reform of the RMB, as an essential part of the development of my country's digital economy, is an important attempt to internationalize the RMB, and it is also an inevitable result of the continuous evolution of the currency system.
At present, there are problems that need to be solved urgently in promoting the construction of the RMB digital system, such as low interest income, difficult protection of personal information, and high threshold for use: First, the rapid growth of digital currency and the sharp increase in the scale of central bank liabilities.
The second is when a crisis occurs, digital currency squeezes bank deposits.
The third is blockchain encryption, and the burden of data growth is heavy.
The fourth is to collect consumer data, and the protection of citizens' privacy is questionable.
Fifth, limited by the amount of mobile phone usage, digital renminbi still has obstacles in the elderly and in areas where the Internet is not popular.
In response to the above problems, the Central Committee of the Democratic National Construction Association suggested that the legislation on digital currency should be improved, and crimes committed in the name of digital currency should be severely cracked down.
Improve legislation related to digital currency, highlight the legal status of digital renminbi, and fill the current legal gap.
Effectively crack down on the copying, forgery and misappropriation of digital renminbi, make clear division of responsibilities for relevant regulatory authorities, and strengthen the responsibility of the main body of supervision.
In addition, the Central China Democratic National Construction Association also suggested that the innovation of digital currency data storage technology should be accelerated and a digital renminbi data storage system should be established.
In order to ensure the widespread use of digital renminbi, it is necessary to increase the development of consumer transaction data storage technology, develop large-capacity data storage equipment, properly handle and save relevant transaction data, and strictly prevent data loss due to technical reasons or network failures.
Recommendations to be formulated
Digital RMB Regulations or Regulations
The digital renminbi is related to the reform of my country's currency system and the rights and interests of the general public. How to regulate it at the legislative level, the representatives put forward relevant suggestions.
Guo Xinming, deputy to the National People's Congress and president of the Nanjing branch of the People's Bank of China, suggested improving the legal basis for digital renminbi.
Currently, financial laws and regulations such as the Law of the People's Bank of China, Law on Commercial Banks, and Anti-Money Laundering Law are being revised and improved.
It is recommended to revise and refine the relevant content of the "Renminbi Management Regulations" and other systems in conjunction with the pilot process of digital renminbi research and development, make overall planning and mutual connection, ensure the coordination between legal systems, and discuss the issuance process of digital renminbi, anti-money laundering, anti-money laundering, Specific and clear regulations have been made on issues such as anti-counterfeiting, personal information protection, and consumer rights protection.
Wang Jingwu suggested that the following aspects should be stipulated at the level of laws and regulations.
First, it is suggested to revise the “Regulations on the Administration of RMB” to clarify the legal attributes of digital RMB.
It is recommended to clarify the legal compensation of digital renminbi at the level of laws and regulations, and make it clear that digital renminbi is a form of renminbi.
At the same time, it should be noted that Article 16 of the "People's Bank of China Law" also stipulates that all public and private debts within the territory of the People's Republic of China should be paid in RMB, and no unit or individual may refuse to accept it.
Considering that the use of digital renminbi requires certain carriers and technical conditions, it is recommended to make exceptions for the use of digital renminbi at the same time. For certain groups, they are allowed to choose to use and accept banknotes or coins under certain conditions.
The second is to formulate special digital renminbi regulations or rules to clarify the operation mechanism of digital renminbi.
Specifically, it can include the following.
First, summarize the experience of the RMB pilot, and clarify the legal status, rights and obligations of the digital RMB participants.
Second, clarify the functions of the digital RMB wallet and the specific rights and obligations of relevant parties.
Third, according to different identification strengths, different digital RMB wallets are distinguished, their respective functions, scope of use and limits are divided, and a wallet system that is different from the account system is established to reflect its uniqueness and superiority.
Wang Jingwu also suggested clarifying the rules for the use of smart contracts.
On the one hand, the subject of use is clearly defined to ensure the universality of smart contract loading, reflecting the superiority of digital renminbi; on the other hand, the People's Bank of China makes standard templates of digital renminbi smart contracts and revise permissions and processes to improve the availability of smart contracts. Fully protect the rights and interests of all parties to the transaction.
In response to the issue of privacy protection in the circulation and use of digital renminbi, Wang Jingwu suggested that the boundaries of privacy protection of digital renminbi should be clarified.
Special requirements are placed on the PBC's personal information protection obligations and privacy protection obligations, and the information it holds can only be used for national security purposes.