Author: Lawyer Liu Honglin
This is not an article written by a human.
It was born from an instant, open dialogue with AI.
As a questioner, I continuously posed a series of questions about digital renminbi, stablecoins, cross-border payments, privacy, public power, market acceptance, and more. These questions did not follow a predetermined outline but naturally extended and deepened as the discussion progressed—some questions stemmed from news, some from real-world intuition, and some carried confusion and hesitation.
The other party in the dialogue responded to these questions one by one without preset conclusions, attempting to provide straightforward and understandable explanations from the perspectives of institutional design, financial logic, technological pathways, and real-world scenarios.
After the dialogue concluded, I did not engage in "extracting viewpoints" or "processing conclusions," but instead chose a more primitive approach: to retain this Q&A as completely as possible, organizing all questions and answers in the order they appeared.
Therefore, what you see in this article is not a piece that "tells you how to view digital renminbi," but rather a record of the thinking process:
How the questions were raised step by step;
How the discussion transitioned from technology to institutions, from payment tools to public power and private rights;
And, in the absence of standard answers, what people are actually debating, worrying about, and expecting.
If you are looking for a clear, firm, and distinctly positioned conclusion, this article may not be suitable for you;
But if you are more concerned with how the questions themselves were gradually asked, then this Q&A format may be closer to the reality of the thinking scene.
Question 1: How should we understand the digital renminbi 2.0 version discussed in today's news?
Answer: The digital renminbi 2.0 version is an upgrade based on the existing digital renminbi. This upgrade may involve richer application scenarios, stronger privacy protection, and possibly more attempts at cross-border payments or smart contracts. In simple terms, it aims to make the digital renminbi more user-friendly, flexible, and better suited for the future digital economy environment.
The latest news is that the People's Bank of China has released a new action plan, which is set to be officially implemented starting next year. The core of this plan is to upgrade the digital renminbi from merely digital cash to something akin to digital deposit currency, meaning it will have deposit insurance protection and can accrue interest, further enhancing the functionality and stability of the digital renminbi.
Question 2: What are the differences between it and the stablecoins available in the market, especially interest-bearing stablecoins?
Answer: I think this is a very interesting comparison. In essence, the digital renminbi 2.0 and those stablecoins issued by private institutions that are pegged to fiat currencies are quite different. Stablecoins are more of a market-driven product, relying on the reserves and credit of the issuer, such as those pegged to the US dollar or euro. In contrast, the digital renminbi is a legal currency directly issued by the central bank, and its credit backing and stability come from the national level, giving it strong advantages in legal status, safety, and widespread use.
In simple terms, the digital renminbi 2.0 is more like a national-level "official stablecoin," while the stablecoins in the market lean more towards market-driven, commercial solutions, and their application scenarios and regulatory approaches will differ.
Question 3: Is it possible to promote digital renminbi in mainland China while issuing a stablecoin pegged to the renminbi overseas by the state?
Answer: This idea is actually quite interesting. Logically, launching the digital renminbi domestically is the first step, and in the future, issuing an official digital stablecoin linked to the renminbi overseas in some form is not entirely out of the question. The benefit of doing so would be to promote the internationalization of the renminbi in the international market, allowing more countries and regions to use the digital form of renminbi more conveniently in cross-border trade or international settlements.
Of course, this would also involve many complex regulatory and international coordination issues, such as the monetary policies of various countries, foreign exchange controls, and the acceptance of central bank digital currencies. But overall, this is indeed a promising idea and could be one of the potential development directions for the digital renminbi in the future.
Question 4: I can understand that the promotion of digital renminbi in mainland China can be government-led. But how can the digital renminbi be accepted by the market in overseas cross-border trade? I saw news that about 97% of digital renminbi transaction volume actually occurs in cross-border payment scenarios.
Answer: Your question makes a lot of sense. Promoting the digital renminbi domestically indeed has strong government backing, making it relatively easy to implement. However, in overseas or cross-border scenarios, for the digital renminbi to be accepted by the market, it must face more market-driven tests.
From another perspective, cross-border payments are inherently a field with strong demand; many businesses and individuals hope for more efficient and cost-effective cross-border settlement methods. If the digital renminbi can provide such conveniences, such as lower fees, faster transaction times, and more stable value support, then the market will naturally begin to accept it due to these tangible benefits.
Additionally, cooperation at the national level or some bilateral agreements may also help promote this acceptance to some extent. After all, if more countries are willing to try using the digital renminbi in trade settlements, the market acceptance will gradually increase.
Question 5: If it relies purely on market forces or market participants, why would they choose digital renminbi?
Answer: Your intuition is quite accurate. Initially, the digital renminbi indeed relied more on government promotion or policy guidance for its application. However, in the long run, for any currency to be truly accepted by the market, it ultimately comes back to the question of "whether it has real value."
If the digital renminbi can provide some real advantages in market transactions, such as lower cross-border payment costs, faster settlement speeds, and clearer compliance boundaries, then market participants will naturally choose to use it for these practical benefits. In other words, when it no longer relies solely on policy but can demonstrate its value in commercial competition, its market acceptance will truly increase.
Question 6: How do you view the relationship between stablecoins and digital renminbi, as well as the future opportunities for both?
Answer: Currently, the Chinese government's attitude towards these two is quite clear: it is continuously promoting and actively building the digital renminbi, while maintaining a high level of caution towards stablecoins.
The digital renminbi is evolving from digital cash to digital deposit currency, with both transaction volume and user numbers continuing to grow. Meanwhile, stablecoins are still regulated under the virtual currency framework in China, with related issuance and trading activities being strictly limited.
However, in the context of the internationalization of the renminbi, there are indeed discussions about whether it is possible to explore digital tools related to the renminbi in specific, controlled cross-border scenarios. Overall, it is a case of "strict regulation domestically, while observing and researching internationally."
Question 7: What does it mean for the digital renminbi to transition from cash to deposits next year? How does it relate to ordinary people?
Answer: This question is indeed a bit difficult to understand, so I will try to explain it as straightforwardly as possible. The original digital renminbi was more like electronic cash; it was mainly used for payments, did not accrue interest, and did not have deposit attributes.
If in the future the digital renminbi gradually acquires "deposit-like" characteristics, it would mean that it might be included in the deposit insurance system and even have the ability to accrue interest. From the perspective of ordinary users, this would make the digital renminbi resemble a safer, more complete digital account rather than just a payment tool.
Question 8: Why is such an update necessary?
Answer: The original design of the digital renminbi was indeed closer to the logic of cash. In other words, it did not accrue interest and did not participate in the financial intermediation process; it was more of a payment tool.
As the scale of use expands, if a large amount of funds remains in this "non-deposit, non-investment" state for a long time, the financial system will face new challenges in liquidity management and user protection. Therefore, promoting the evolution of the digital renminbi towards deposit-like characteristics is essentially to better integrate it into the existing financial system rather than letting it exist outside of it.
You can think of the previous digital renminbi as an "electronic version of cash." Its essence is the digital form of cash, which does not accrue interest and does not have a deposit insurance mechanism like bank deposits; its safety mainly comes from the credit of the central bank.
The current discussion about the upgrade is to make this "electronic cash" more like a deposit in a bank account. In other words, it will no longer be just a payment tool but will gradually acquire deposit attributes, potentially being included in the deposit insurance system and even having the ability to accrue interest in the future.
For ordinary people, the essential change is that the digital renminbi is no longer just "spendable money," but is starting to become "money that can be saved."
Question 9: If I hold digital renminbi in my account and want it to earn interest like a deposit, do I need to perform an additional operation in the wallet to convert it into an investment product?
Answer: Yes, your understanding is correct.
It is not the case that simply "holding" digital renminbi will automatically earn interest; you need to perform an additional operation in your wallet. For example, you would need to transfer the digital renminbi to an account that has deposit or deposit-like attributes for it to start accruing interest.
This logic is actually similar to the current banking system, except that in the future, this operation may be designed to be very simple and completed directly within the digital renminbi wallet.
Question 10: So it is not like interest-bearing stablecoins where holding them automatically earns interest, but rather you must use them to purchase bank deposits to earn interest, correct?
Answer: Yes, that is completely correct.
The logic of the digital renminbi still follows the banking system logic, rather than the "automatically earning interest" model of DeFi or interest-bearing stablecoins. You need to actively choose to convert it into some form of deposit or deposit-like shape for it to generate interest.
So from a mechanism perspective, it leans more towards traditional finance rather than on-chain finance.
Question 11: The news says that Shanghai has established a digital renminbi operation center. What does this mean? Why is an operation center needed?
Answer: This question is actually quite critical.
The digital renminbi operation center is essentially a regional hub institution. It does not simply engage in "transactions," but is responsible for connecting the central bank's digital renminbi system with local governments, enterprises, merchants, and specific application scenarios.
From a business perspective, its value mainly lies in several aspects:
Helping enterprises and merchants access the digital renminbi system;
Providing technical support, training, and operational services;
Promoting the implementation of local application scenarios.
So it is more like a service node for infrastructure rather than a traditional company pursuing profit maximization.
Question 12: Why is China so actively promoting digital renminbi?
Answer: The core goal of China's promotion of digital renminbi is not short-term market hype, but rather the long-term construction of financial infrastructure and the digitization of monetary sovereignty. Such matters are unlikely to have a strong market voice from the outset.
The reason it felt "quiet" in previous years is partly because there were not enough application scenarios, and partly because users' existing payment tools were already very mature, with no strong demand for alternatives.
However, from a national perspective, such matters are more of a "slow variable" that requires long-term promotion rather than relying on market speculation.
Question 13: What scenarios are there where digital renminbi is indispensable? Can't WeChat and Alipay also facilitate payments?
Answer: Your question touches on the essence.
From the perspective of ordinary consumers, in most daily payment scenarios, WeChat and Alipay are indeed sufficient and there is no situation where "digital renminbi is absolutely necessary."
However, in certain specific scenarios, the digital renminbi has its unique value, such as: government subsidy distribution, public financial expenditures, certain cross-border settlement scenarios, or payment situations that require higher security and national credit.
Additionally, the digital renminbi does not rely on any commercial platform; it is a liability of the central bank, which is irreplaceable in certain policy and institutional designs.
Question 14: How should we understand the ability to complete payments without a network? How is this achieved?
Answer: This is what is known as "dual offline payment."
In simple terms, the payment device for digital renminbi (such as a phone or card) contains a secure chip. In the absence of a network, transactions can be recorded and verified locally, and payments can be completed through near-field communication and other methods.
Once the device is reconnected to the network, the transaction data is uploaded to the bank system for final settlement.
This mechanism is very valuable in scenarios where network conditions are unstable or in emergency situations.
Question 15: If my phone is out of battery or turned off, can I still use digital renminbi for payment?
Answer: If the phone is completely out of battery or turned off, then it cannot be used for direct payment because the device itself cannot operate.
However, alternative solutions are currently being explored, such as physical cards or wearable devices. These devices can also store a certain amount of digital renminbi for small payments.
Question 16: Are the cards you mentioned similar to bank cards or public transport cards with chips?
Answer: Yes, your understanding is very close.
Its principle is similar to that of public transport cards and access cards, where the card contains a secure chip that can store a certain amount of digital renminbi. In the absence of a phone or if the phone is out of battery, it can still be used for small payments.
Currently, this form has not been widely adopted, but it is indeed a direction that digital renminbi is exploring.
Question 17: Does the current digital renminbi solution involve blockchain?
Answer: The current digital renminbi does not operate on a public blockchain.
It is a system led and centrally managed by the central bank, not a decentralized network like Bitcoin or Ethereum. However, in its technical design, it does borrow some ideas from distributed ledger and cryptographic technologies to enhance security and reliability.
Question 18: When you say "borrowing blockchain ideas," what does that specifically mean?
Answer: The "borrowing" here mainly refers to the use of cryptographic technologies and data structures similar to blockchain in aspects such as data security, tamper-proofing, and transaction traceability.
However, it is not a decentralized ledger; the ultimate accounting and management rights remain centralized within the central bank system.
Question 19: Does that mean that the user's funding chain will be completely recorded?
Answer: This can be understood that way. Since the digital renminbi is centrally managed by the central bank, every transaction record will be retained in the system. From a technical perspective, the central bank indeed has the ability to trace the flow of funds.
Of course, this does not mean that everyone can see these records; rather, it means that under regulatory and compliance frameworks, relevant authorities have the capability to trace the funding chain in accordance with legal conditions. This is also an important advantage of the digital renminbi in anti-money laundering and combating illegal activities.
Question 20: Will this lead to users' privacy or personal information being more easily visible?
Answer: This is a common and reasonable concern.
From a technical capability standpoint, the digital renminbi indeed makes it easier for regulatory authorities to grasp the flow of funds, which is fundamentally different from traditional cash. However, officials have consistently emphasized that they will seek a balance between privacy protection and regulatory needs through tiered management and the principle of minimal necessity.
In other words, small, everyday transactions will not be casually viewed; relevant data will only be accessed in accordance with legal procedures.
Question 21: How do you view the U.S. promoting dollar stablecoins while prohibiting the issuance of a digital dollar?
Answer: Yes, this indeed reflects a typical discussion of "public power versus private rights."
In the U.S., some people are concerned that if a central bank digital dollar is launched, the government may have overly strong financial monitoring capabilities, thereby infringing on personal privacy and freedom. Therefore, they prefer to meet digital payment needs through a market-driven stablecoin system.
In contrast, countries like China emphasize financial governance capabilities and systemic risk prevention, leading to different institutional choices.
Question 22: Does this mean that many people may be reluctant to use digital renminbi due to privacy concerns?
Answer: Yes, this situation is quite likely.
For users with high sensitivity to privacy, they may continue to choose cash or existing third-party payment tools in certain scenarios, while being more cautious about using digital renminbi.
At the same time, some users may choose to use digital renminbi due to its advantages in security, government service integration, and cross-border scenarios. Ultimately, a state of "usage by scenario" will form.
Question 23: From the perspective of a clean government, if civil servants or public institutions use digital renminbi to distribute salaries and benefits in the future, will it be more conducive to integrity?
Answer: From the perspective of institutional design, there is indeed this possibility.
Using digital renminbi to distribute salaries and benefits can make the flow of funds more transparent and facilitate financial supervision and auditing. Theoretically, this helps reduce gray areas and improve the transparency and standardization of public fund usage.
Question 24: From the perspective of currency issuance, is the digital renminbi a one-to-one mapping of already issued cash, or is it issued directly?
Answer: The digital renminbi is directly issued by the central bank.
It is not simply a digital mapping of existing paper currency but a new form of legal currency that exists alongside cash. The central bank will decide the issuance scale of digital renminbi based on needs, just as it manages cash issuance.
Question 25: We know that stablecoins on the blockchain can be frozen or destroyed; does the digital renminbi have a similar mechanism?
Answer: Yes, it does.
Although the digital renminbi is not based on blockchain, because it is a centrally managed system by the central bank, it also has the capability to freeze or invalidate funds under specific circumstances at the technical and management levels.
These mechanisms are mainly used for judicial assistance, handling illegal activities, and other compliance scenarios, not for casual daily use.
Question 26: The freezing of on-chain stablecoins is based on addresses; is the digital renminbi based on addresses or user identities?
Answer: The logic of the digital renminbi is more inclined towards being based on user identity, which is a real-name identity system based on KYC.
Unlike on-chain stablecoins that center around addresses, the account system of the digital renminbi will ultimately be linked to specific individuals. This is a fundamental difference in regulatory and compliance aspects compared to blockchain systems.
Question 27: Does this mean that as long as I use digital renminbi, regardless of which bank I open an account with, my overall assets can be uniformly viewed?
Answer: From the perspective of the state and the central bank, this capability does exist.
You can open digital renminbi wallets at different banks and different operating institutions, but these wallets will ultimately be linked to the same real-name identity. From a regulatory perspective, it is possible to conduct overall identification and management of your digital renminbi assets.
Of course, this does not equate to casual viewing; rather, it is the capability within a compliant and legal framework.
Question 28: Will you use digital renminbi?
Answer: From an objective and rational perspective, I would use digital renminbi in appropriate scenarios.
For example, in government services and specific payment scenarios, it indeed has convenience and institutional advantages. However, from the standpoint of personal privacy and usage habits, I would also choose different payment methods based on different scenarios, rather than using only one tool.
Everyone will find the most suitable way to use it based on their own concerns and needs.
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