Guotai Haitong Securities released a research report highlighting the accelerating penetration of the digital yuan across upstream technological support, midstream system adaptation, and downstream terminal implementation, signaling vast growth potential. Key takeaways include:
1) **Banking IT & Fintech Sector**: The digital yuan is driving demand for bank system upgrades and digital wallet development. 2) **Payment Ecosystem**: Expansion of digital yuan applications will spur upgrades in POS terminals, ATMs, and hardware wallets, while payment providers stand to gain from increased service fees via broader adoption.
**Core Insights on Digital Yuan**: - As a central bank-issued digital legal tender, the digital yuan has evolved from retail to corporate and cross-border applications, positioning itself as critical infrastructure for the digital economy. - Operating under a "centralized management + two-tiered operation" model, it functions as a cash-like payment instrument (M0). Pilot programs now span 17 provinces, supported by an international operations center and platforms for cross-border payments, blockchain services, and digital assets. - The Beijing Operations Center oversees central bank-side system development, ecosystem coordination, and innovation in monetary payments, fostering industry-wide impact across scenarios and functionalities.
**Growth Catalysts**: 1) **Internationalization of RMB**: The digital yuan addresses inefficiencies in traditional cross-border payments (speed, cost, security), bolstering RMB’s global role. 2) **Mature Digital Payment Ecosystem**: High penetration of digital payments in China, coupled with zero-fee transactions under the digital yuan, incentivizes payment providers to drive adoption.
**2030 Market Projections**: - **Domestic Consumer Payments**: Estimated at ¥12.2–61.2 trillion (3%–15% penetration of a projected ¥408 trillion digital payment market). - **Cross-Border Payments**: Projected at ¥40.6–162.4 trillion (20%–40% penetration of global cross-border flows, with RMB accounting for 10%–20%). - **Total Potential**: Combined transactions could reach ¥52.8–223.6 trillion by 2030, with third-party payment firms—especially in cross-border services—poised to benefit.
**Risks**: Policy adjustments, technological obsolescence, security vulnerabilities, and intensifying competition.
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