The central bank is forced to intervene, and the digital renminbi begins to fight back

In the past month, the central bank’s actions regarding digital RMB have been unusually intensive.

From external initiatives, on the 11th of this month, the central bank authorized DBS Bank to serve as the new Singapore dollar clearing bank. DBS Bank is Singapore’s largest commercial bank, and Singapore’s status as an Asian financial center is undisputed. The implication behind this is clear— the central bank is accelerating the internationalization of the RMB. Currently, 32 RMB clearing banks have been authorized in 29 countries and regions, with scale and speed both increasing.

Internal policies are equally decisive. On the 12th, the Ministry of Commerce, together with the central bank and the Financial Regulatory Administration, issued a notice on strengthening business and financial coordination to boost consumption. Have you noticed? The main participants in this document happen to be the key discussion parties of the 1128 meeting. When three agencies act simultaneously, what does it mean? Everyone should be aware—we are not taking the stablecoin route because we have the digital RMB as our chip.

The most crucial decision was made today: starting next year, the digital RMB will begin to accrue interest. From the convening of the November 28th meeting to the series of related policies launched intensively in December, this speed of decision-making and execution demonstrates how determined the central bank is.

And the root of all this stems from the crazy development of cryptocurrencies pushing the central bank into a corner, especially the savage expansion of stablecoins, which forced regulators to adopt a series of restrictive measures in response.

A New Layout Centered on Dual Circulation

The central bank’s response is to launch its own digital currency solution. The strategy is clear: externally, to seize market share by expanding the breadth and speed of RMB internationalization; internally, to meet domestic demand by increasing the usage rate of digital RMB.

This is essentially the central bank’s version of a stablecoin—CBDC stablecoin, which also operates based on blockchain technology. The fundamental difference is that the issuer is the central bank, not a private institution. Compared to market stablecoins, this model has inherent credit advantages and regulatory compliance.

Smart Contracts Are the Killer App

The reason why digital RMB has a better outlook than stablecoins lies in its smart contract functionality. This feature can effectively address the chronic issues in current consumer subsidy fields—misappropriation of funds and default problems.

How exactly does it work? Take education and training as an example: parents use digital RMB smart contracts to pay tuition. The funds are automatically released to merchants based on the number of classes completed, which both trusts the central bank’s system and prevents training institutions from absconding with funds. If a merchant breaches the agreement midway, the funds will be frozen, making risks fully controllable.

The same logic applies to other high-risk areas. In financial activities involving high leverage, smart contracts have become a societal-level risk control tool, playing an important role in preventing systemic financial risks.

Banks have already begun developing their own application scenarios based on this. The Bank of Communications launched a procurement-related smart credit contract wallet, and the Agricultural Bank of China designed a fund supervision smart contract for shared leasing companies. The development logic of these applications is similar to public blockchain applications, except not everyone can participate in development.

This Is a Long-term National Strategy

Do not underestimate the central bank’s determination regarding digital RMB. Future usage scenarios will only become richer, and coverage will only expand.

Compared to directly competing with stablecoins, the central bank has chosen a smarter path—developing its own digital RMB ecosystem. This integrated approach can enhance the RMB’s position and competitiveness in the international market externally, and internally, it can develop practical application scenarios that stablecoins cannot achieve. These advantages are unmatched by any private stablecoin on the market.

In the future, the widespread use of digital RMB will become as common as QR code payments today, becoming a standard part of daily financial life.