CITIC Securities: Banks Need to Seize Opportunities to Increase Digital Renminbi Penetration Rate

According to a report by Jinshi, CITIC Securities stated that the digital renminbi is evolving from the "central bank liability type" 1.0, which replaces cash, to the "deposit currency type" 2.0, which is incorporated into commercial banks' liability systems. Its accounts can accrue interest and meet reserve requirements, effectively becoming general deposits.
This institutional adjustment helps to strengthen the stability of bank liabilities and enhances the efficiency of monetary policy transmission under the reserve and interest rate framework. It also significantly boosts the endogenous incentives for commercial banks to promote digital renminbi. From an industry perspective, digital renminbi is expected to become an important tool for the linkage between corporate and retail sectors, and to form a certain substitution effect on third-party platforms in the payment process. It is anticipated that the future development focus of banks' digital renminbi business will shift from qualification to capability. Banks need to accelerate the transition from account operation to scenario-based professional services and seize opportunities to increase digital renminbi penetration rate.