The upgrade of digital RMB: The central bank's ambition to restrict encrypted assets

Recent series of intense actions by the central bank reveal a clear signal——digital renminbi has become a top priority in the country’s financial strategy. From authorizing DBS Bank as the renminbi clearing bank in Singapore, to the Ministry of Commerce coordinating with the central bank to issue consumption boost notices, and announcing that digital renminbi will start accruing interest next year, these seemingly independent measures actually point to the same goal.

Strategic Adjustments Forced Out

The frantic expansion of global stablecoins has become a catalyst. As USDT, USDC, and other dollar stablecoins rapidly penetrate worldwide, the central bank realizes it must use its own tools to impose restrictions rather than passively follow. This is not a simple policy response but a defense of financial sovereignty.

The central bank’s logic is clear: rather than passively restricting stablecoins in the market, it is better to proactively launch a central bank digital currency (CBDC). Digital renminbi is essentially a stablecoin substitute endorsed by the central bank, but its advantage lies in integrating blockchain technology with traditional financial regulatory frameworks.

New Scenarios Driven by Dual Circulation

Externally, digital renminbi acts as an accelerator for the internationalization of the renminbi. So far, the central bank has authorized 32 renminbi clearing banks in 29 countries and regions, with Singapore’s authorization being just one step. Promoting digital renminbi settlement can directly increase the renminbi’s share in international trade.

Internally, the focus is on expanding usage scenarios. Areas involving capital flow, such as government subsidies, educational training, and leasing contracts, have become testing grounds. Current consumption subsidy policies indeed face issues like false reporting and embezzlement. The smart contract functions of digital renminbi can fundamentally solve this chronic problem.

Smart Contracts: A Tool to Reduce Leverage for All

This is the core advantage of digital renminbi over traditional payment methods. Taking educational training as an example: parents do not need to pay the full tuition upfront but can release funds proportionally according to the course progress. If the institution runs away midway, the remaining funds are frozen by smart contracts and cannot be diverted for other uses.

Similar logic can be extended to high-leverage fields like shared rentals and supply chain financing. Digital renminbi’s smart contracts become tools for systemic financial risk prevention. Banks like ICBC, Bank of China, and Agricultural Bank of China have already developed specialized applications based on this feature, such as procurement credit and rental fund supervision.

Competitive Advantages Over Stablecoins

Unlike market stablecoins like USDT or USDC, which only provide transfer and settlement functions, digital renminbi, through the dual support of central bank regulation and smart contracts, forms a unique competitive edge. These are difficult for decentralized stablecoins to achieve because they cannot have the same post-facto accountability and fund control mechanisms as a central bank.

In the future, the adoption of digital renminbi is likely to reach the level of mobile payments. This is not only financial innovation but also a manifestation of policy control—using proprietary tools to grasp the discourse in finance, far surpassing passive responses to external shocks.