Digital RMB Scenario Innovation Speeds Up Prepaid Smart Contract Product “Yuanguanjia” Released
2022-09-14 09:38:39Source: China Economic Net – “Economic Daily”
The right picture shows the digital RMB IP “Yuanyuan” at the 2nd China (Beijing) Digital Finance Forum in 2022.Photo by Wang Xiaoqiang
At the 2nd China (Beijing) Digital Finance Forum held recently, the Digital Currency Research Institute of the People’s Bank of China released the digital RMB smart contract prepaid fund management product – “Yuanguanjia”. Digital RMB smart contracts refer to computer programs that are triggered and automatically executed based on predetermined events and can control digital RMB. To put it simply, it is to write a contract with a computer program, and automatically complete the digital RMB payment to fulfill the contractual obligations according to the agreed conditions.
Industry insiders believe that after the release of products such as “Yuan Butler”, digital renminbi and smart contracts can collide with more application scenarios in the future, which will accelerate the promotion of digital renminbi.
Effectively solve consumption “pain points”
Many people have had this experience – barber shops, gyms, and training institutions run away with money, and the pre-charged money is gone. Now, there is a new solution to this problem. The digital renminbi smart contract prepaid fund management product – “Yuan Butler” is precisely to solve this “pain point” of consumers.
According to reports, in response to the frequent problems of prepaid funds merchants running away and infringing on consumer rights and interests in recent years, the Data Research Institute has investigated the needs and pain points of consumers, merchants, regulatory agencies and other parties, and designed and released the “Yuan Butler”. ”, this product can deploy smart contracts on digital RMB wallets, and provide solutions to prevent merchants from misappropriating funds and protect users’ rights and interests in prepaid consumption service scenarios.
Houhai Training School in Chaoyang District, Beijing is one of the first merchants to participate in the digital RMB smart contract prepaid consumer service project. Huang Yafeng, director of the school’s school office, said that with the use of digital renminbi smart contracts, parents can enjoy more assured services, and training institutions use digital platforms to help solve fund management and parent trust issues.
In the traditional account model, the management of prepaid funds is mainly solved by the way commercial banks open special accounts for merchants. All prepaid funds are owned by merchants, which cannot completely solve the problem of user rights protection. Di Gang, deputy director of the Institute of Digital Research, introduced that in the case of using digital RMB smart contracts for prepaid fund management, the operating agency will be based on the business model of the merchant, such as the content of goods or services corresponding to the prepaid fund, the prepaid fund settlement model, and default clauses, etc. , select a contract template and deploy it in a trusted environment.
To put it simply, when consumers prepay funds to merchants, the operating agency creates a digital wallet loaded with smart contracts for each consumer. On the one hand, the contract terms are written into the smart contracts, and merchants cannot arbitrarily transfer consumers’ prepayments. Funds; on the other hand, before the actual consumption, the prepaid funds are still owned by consumers, which can protect the safety of consumers’ funds even if the merchant goes bankrupt and liquidates. When the consumer completes the actual consumption, the merchant initiates the execution request of the smart contract, and the smart contract checks whether the agreed execution conditions are met, and the prepaid funds can be transferred to the merchant only if the conditions are met. The possibility of misappropriation of prepaid funds by human operations is technically excluded. Consumers can see the account details of each fund in the digital RMB APP, and merchants can also see the real-time status of prepaid funds through the service channels of operating agencies, which is convenient for business arrangements.
“This helps to protect the legitimate rights and interests of both consumers and merchants.” Wang Pengbo, a senior analyst at Broadcom Consulting, said that “Yuanguanjia” mainly solves the problem of opaque use of funds caused by information asymmetry, easy to be misappropriated or merchants “running away” “question. The innovation of this product is mainly to use smart contract technology to improve the prepaid payment process. The ownership of consumer funds is clearer than before. At the same time, the contract terms are written into the smart contract, which technically eliminates the possibility of artificially misappropriating prepaid funds.
Scenario application potential is huge
“At present, we have received market demand from many industries and regions that are eager to apply digital RMB smart contracts.” Di Gang introduced, such as financial subsidies, loans, scientific research funds, etc., there are strictly limited scenarios for the recipients of funds and the purpose of payment. ; Prepaid fund management, fund collection, intelligent account division, etc., involving fund depository and complex fund exchange relationships between multiple entities; periodic payment, deposit refund, etc., which need to ensure timely and automatic transfer of funds. Scenarios such as supply chain trade that rely on trusted information input.
“In these typical scenarios, digital RMB smart contracts will show positive effects such as controlling risks, protecting rights and interests, enhancing mutual trust, reducing costs and increasing efficiency, and providing support for social digitization and intelligent governance.” Di Gang said.
The reporter noticed that the current consumption red envelope activities carried out in various pilot areas are already a standardized solution for digital renminbi. The consumption red envelopes use smart contracts to limit the conditions of use of digital renminbi. They cannot be transferred or redeemed into bank accounts, and can only be consumed at designated merchants. If the user does not use it within the time limit, this part of the digital RMB will be automatically returned to the investor according to the smart contract settings. The consumption red envelopes can be used both offline and online, and can be split and used, and additional conditions such as “full availability” can be superimposed, which preliminarily reflects the interoperability and templated advantages of digital RMB smart contracts.
As the operating agency of digital renminbi, commercial banks are also actively participating in the construction of digital renminbi smart contract scenarios. Zhang Xiaofeng, Deputy President of Bank of Communications Beijing Branch, introduced that Bank of Communications has initially formed a smart contract template around the industry-specific professional attributes, embedded in beautiful villages, education and training, corporate services and other industry scenarios, and innovated “pluggable, assembling, and fast output”. Smart contract product services, combined with regional characteristics and customer characteristics, further supporting targeted smart contract product reserves and closed-loop solutions.
“The ecological construction of digital RMB smart contracts has just started, and there is still a lot of basic work to be done. Next, the Institute of Data Science will continue to solidly promote related work under the central bank’s centralized management and two-tier operation framework.” Di Gang introduced, firstly, Promoting mature digital RMB smart contract solutions in an orderly manner, expanding from the education and training industry to various scenarios with prepaid fund management needs such as retail, catering, sports, employee benefits, etc., using regulatory technology to help related industries prevent risks, promote consumption, Invigorate. The second is to respond to the differentiated market demands of various industries, further enrich the digital RMB smart contract solutions, and implement smart contract applications in the fields of fund collection, smart account division and other fund settlement fields, retail fields such as merchant marketing and smart payment, and domestic and foreign trade. The third is to continue to carry out in-depth research on cutting-edge technologies, continue to optimize the base support capabilities, and speed up the construction of the digital RMB smart contract ecological service platform. The fourth is to establish and improve the ecological governance and sustainable development mechanism of digital renminbi smart contracts, ensure the legality, effectiveness and interoperability of contract templates, promote the construction of a trusted environment for digital renminbi smart contracts, and formulate supporting business specifications and technical standards. Under the premise of safety and controllability, we will explore effective incentive mechanisms and give full play to the power of social innovation.
Operating agencies will also continue to make efforts in the field of digital RMB smart contracts. Zhang Xiaofeng said that Bank of Communications will make use of the openness and open source of the digital RMB smart contract ecological service platform in the future, cooperate with cooperative institutions to enrich smart contract templates, build a smart contract ecology, expand applications in public areas such as finance and people’s livelihood, and realize the use of public funds. Full-link monitoring to improve the utility of government funds.
Subsequent construction is still to be improved
At present, the application of digital RMB smart contracts faces problems such as institutional connection and residual risk prevention, which still need to be solved in the next application promotion.
He Dong, deputy director of the Monetary and Capital Markets Department of the International Monetary Fund, believes that although smart contracts can improve payment and settlement efficiency, increase convenience, and reduce transaction performance costs and risks, they must also avoid the problem of low transparency, prevent prejudice and discrimination, and at the same time The enforcement of relevant laws and dispute resolution mechanisms also need to be considered.
Regarding the development of digital RMB smart contracts, Huang Butian, chairman of Hangzhou Yunxiang Network Technology Co., Ltd., believes that the next step should be to continuously explore how to ensure the security of contracts, how to enable ordinary users to understand digital contracts, and how to make contracts better. Standardize development, reduce development difficulty, and reduce the input cost of ecological partners, so that it has adaptability to a wider range of scenarios.
Wang Pengbo said that the digital renminbi smart contract has a wide range of application scenarios. Currently, it is widely used in government subsidies, prepaid fund management and other fields. In the future, as long as the scenarios meet the conditions of opacity of funds and strict restrictions on the use of payment, there is potential for application. However, it is still necessary to speed up the construction of the corresponding official platform and the underlying design, so as to help it be applied on a larger scale in the future.
When talking about the development of digital renminbi smart contracts, Fan Yifei, deputy governor of the People’s Bank of China, said that digital renminbi smart contracts have been successfully applied in the fields of consumer red envelopes, government subsidies, retail marketing, and prepaid fund management, with good results. In the future, the following aspects should be paid attention to in the specific promotion: First, the digital renminbi smart contract should play a practical role in supporting the development of the digital economy, serving the construction of the business environment, and improving digital governance capabilities. The technical characteristics of consistency, observability, and self-enforcement that smart contracts need to have, superimposing the status of digital RMB as a legal currency and the advantages of “account, quasi-account and value characteristics” are conducive to improving transaction transparency, reducing contract performance costs and default risks. It is conducive to the protection of consumers’ rights and interests, the cost reduction and efficiency improvement of enterprises, and the optimization of supervision capabilities. Secondly, digital RMB smart contracts must adhere to openness, inclusiveness and fair competition, and must be promoted under the principles of central bank centralized management and “two-tier operation” structure to avoid the formation of new information barriers. It is necessary to extensively connect various external ecosystems, ensure the interoperability of smart contract systems and external systems, authentication and compliance check data, and operating environments, and more efficiently adapt to the actual needs of all walks of life. Thirdly, digital renminbi smart contracts should pay attention to institutional connection and risk prevention. Fan Yifei said that, on the one hand, the legitimacy, consistency and versatility of contract templates are an important basis for smart contracts to exert the value of mandatory performance, so an effective mechanism should be established to strengthen their management; on the other hand, the application of new technologies will help solve the reality However, smart contracts cannot eliminate the inherent risks of various industries. It is necessary to strengthen communication and coordination with relevant industry management departments and judicial departments to jointly discuss the management of residual business risks. (Economic Daily reporter Chen Guojing)