With the continuous advancement of technology and the booming development of the digital economy, digital currency has become an important development trend in China's financial sector. In China, the introduction and application of the digital yuan not only marked a major evolution in the form of money, but also brought unprecedented opportunities for change in supply chain finance.
Characteristics and advantages of digital yuan
The digital yuan is issued by the People's Bank of China. It has the characteristics of legal reimbursement and no interest, and supports functions such as offline payments and smart contracts. Its launch aims to address foreign currency risks, promote the development of the digital economy, improve the level of financial services, and enhance the internationalization of the RMB. The digital yuan has more than 10 million application scenarios, covering various fields such as living expenses, catering services, transportation, shopping and consumption, government services, etc., to meet the diverse payment needs of the public.
Compared with traditional payment methods, digital yuan has significant advantages such as speed, safety, and convenience. It is based on blockchain technology to achieve full process traceability of capital flow, effectively reducing transaction costs and risks. In addition, the digital yuan also supports integration and interoperability with existing payment systems, providing the public with more payment options and convenience.
The application of digital yuan in supply chain finance
Supply chain finance is a financial service model that uses the credit of core enterprises in the supply chain to enhance the credit of upstream and downstream micro, small and medium-sized enterprises to achieve financial access. As the core digital finance infrastructure, the digital yuan provides important technical and methodological support for the development and reshaping of supply chain finance.
Micro, small and medium-sized enterprises face “difficult” and “expensive” problems in the financing process. The digital yuan “three streams in one” chain ledger guarantees the authenticity of loan contracts and business operation data, and reduces capital costs. The digital yuan's chain-based traceability mechanism enables full-process monitoring of policy funds, effectively preventing and controlling moral risks during policy implementation, and unblocking the transmission mechanism of monetary policy.
$SY HOLDINGS (06069.HK)$First to launch the “digital yuan+supply chain finance” application
Hong Kong stock listed companies$SY HOLDINGS (06069.HK)$As a leading supply chain technology platform, it has pioneered the implementation of the “digital yuan+supply chain finance” application scenario. With the support of various digital yuan pilot regions and local financial supervisory authorities, Shengye has accelerated the development of supply chain finance through digital yuan, and promoted inclusive finance to better serve the development of micro, small and medium-sized enterprises.
According to the reporter's understanding, “For a long time, when supporting micro, small and medium-sized enterprises, traditional financial institutions have focused on credit evaluations of subjects, so they will set a series of conditions during the admission process. If micro, small and medium-sized enterprises want to successfully apply for financing, they need to meet various conditions such as operating period, business scale, mortgage guarantee, and tax situation. However, micro, small and medium-sized enterprises already have various shortcomings such as small scale, low credit, and low collateral, so it is difficult to gain the trust and support of traditional financial institutions. At the same time, in the face of these micro, small and medium-sized enterprises, it is also difficult for traditional financial institutions to complete credit assessments quickly, accurately, and inexpensively.”
The essence of financial activity is business risk. Using digital yuan chain ledger technology, it is possible to ensure that the transaction information in the credit and financing activities of micro, small and medium-sized enterprises is fully and accurately recorded, stored for a long time, and cannot be tampered with, effectively helping supply chain technology enterprises judge the risk level, operating status, and repayment capacity of micro, small and medium-sized enterprises.
Sheng Ye, Chief Strategy Officer of Shengye, pointed out, “Compared with traditional loans, digital yuan factoring loans use smart contracts to agree on rules such as the flow of funds, use targets, and usage ratios to ensure the authenticity of the use of funds and ensure the safety of funds. Furthermore, the advantages of digital yuan in large capital transactions and traceable transaction records throughout the process effectively monitor transaction behavior and enhance the customer experience.”
It is worth noting that the digital yuan smart contract open ecosystem provides a broad space for financial innovation. Mu Changchun, director of the Central Bank's Digital Currency Research Institute, said when discussing the design concept of an open digital yuan smart contract ecosystem, “In the top-level design of the digital yuan, the programmability of the digital yuan is realized by loading smart contracts that do not affect currency functions, so that the digital yuan can carry out automatic payment transactions according to the conditions and rules agreed upon by the parties to the transaction on the premise of ensuring safety and compliance. As a digital form of legal tender, the digital yuan has great advantages in establishing an ecosystem that supports smart contract applications.”
The innovative application of digital yuan in supply chain finance has not only solved the financing problems of micro, small and medium-sized enterprises, but also brought new development opportunities to the entire financial industry. With the continuous maturity of technology and the continuous expansion of applications, digital yuan is expected to become an important force driving the transformation and upgrading of the supply chain finance industry.