Title: "Hainan Sanya Digital RMB Pilot Survey: First, Let's Use Digital RMB"

Author: Pan Shipeng, Economic Daily

In Hainan, using digital RMB for payments is becoming an increasingly popular choice among consumers. In November last year, Hainan was added as a pilot area for digital RMB, becoming the only province-wide pilot area in the country. Now, a year has passed; how is the pilot program doing? The reporter visited Sanya City in Hainan, a city rich in diverse and unique consumption scenarios, to see what people think about digital RMB. Are consumers accustomed to this new experience? What do merchants think?

"Just scan with your phone, it's very convenient!" During the "Digital RMB, Travel Anywhere" red envelope consumption activity held in Sanya, citizen Chen Fangfang was delighted to receive an 800 yuan digital RMB red envelope, experiencing the convenience of digital RMB payments. "Many of my friends have downloaded it; it's easy to use. I hope digital RMB can be used in more places and stores in the future."

Hainan is currently the only province-wide pilot area for digital RMB in the country. Since the end of 2019, the People's Bank of China has conducted pilot tests for digital RMB in Shenzhen, Suzhou, Xiong'an, Chengdu, and the 2022 Beijing Winter Olympics venues. Starting in November 2020, six new pilot areas were added: Shanghai, Hainan, Changsha, Xi'an, Qingdao, and Dalian. Now, with a year of pilot experience in Hainan, the reporter visited Sanya City to observe the implementation of digital RMB.

A Brand New Payment Experience

This is a completely new payment experience.

After getting on the bus, open the generated QR code for the ride, align it with the card reader's corresponding position, and the digital RMB payment process can be completed in less than a second.

Sanya local Shi Runli has been commuting by bus. She was surprised to find that using digital RMB to buy tickets allows her to enjoy discounts while riding the bus.

"A one-way fare usually costs two yuan, but recently the bank has been running a promotion where digital RMB payments can get a 50% discount on bus fares. I can save two yuan on a round trip every day, which is very economical." Shi Runli mentioned her "connection" with digital RMB, saying she was influenced by her friends. There is also a small "regret"—"Last time Sanya held a lottery event, I initially didn't believe it, but later saw friends winning prizes, and then I knew it was real. Now I have linked my digital RMB to Cloud Quick Pass, and I can enjoy many discounts for daily payments."

No need for cash; just a gentle touch or a scan with the phone completes the payment. The convenience of digital RMB has left those who are "trying it out" in awe.

At the Agricultural Bank of China Sanya Jinhe Branch, a staff member told the reporter, "The biggest feature of digital RMB is its higher security, which can effectively reduce transaction costs, improve credit efficiency, and enhance payment convenience, making it very attractive. Since the launch of the digital RMB pilot program, major banks in Sanya have been actively promoting it and introducing it to customers visiting the bank."

As one of the popular tourist destinations, Sanya actively supports the implementation of digital RMB in various scenarios such as duty-free shopping, dining, transportation, retail, and cultural tourism. To encourage citizens and tourists to actively use digital RMB, in September this year, the Sanya Municipal People's Government and the Haikou Central Branch of the People's Bank of China jointly hosted the "Digital RMB · Travel Anywhere" red envelope consumption activity. The Sanya municipal government allocated a total of 10 million yuan in 28,000 digital RMB red envelopes, attracting about 117,600 participants, with approximately 27,900 winners drawn, creating a significant response locally. The event also invited nearly 3,000 tourists from 10 pilot cities and regions, marking a cross-provincial attempt for digital RMB.

The number of "early adopters" is increasing. Nationwide, as of October 8 this year, the number of digital RMB pilot scenarios has exceeded 3.5 million, with a total of 123 million personal wallets opened and a transaction amount of approximately 56 billion yuan.

Positive Impact on Fund Flow

Promoting the use of digital RMB focuses on enhancing residents' awareness, acceptance, and usage frequency, which requires a broader and richer range of consumption scenarios for digital RMB wallets. To learn more about the usage of digital RMB by shops and merchants, the reporter visited Bohao Village in the Jiyang District, adjacent to the Yalong Bay National Tourist Resort in Sanya. This area boasts beautiful scenery, and in recent years, the homestay economy has surged. In this small village favored by young tourists, many homestays and shops accept digital RMB payments.

The Sanya Jiyang Wuyun Valley Travel Rental Shop was the first business in the village to respond to the opening of digital RMB payment services. The owner, Peng Weiwei, proudly stated, "Bohao Village is a popular homestay destination in Sanya, and we were the first to open digital RMB payments, which is very trendy. Digital RMB payments will become the main method and trend of payment in the future."

The promotion of digital RMB requires not only a large number of willing citizens but also significant participation from merchants, which is precisely the work that the Sanya Financial Development Bureau is striving to advance.

Entering the Sanya Summer Department Store, the reporter saw promotional posters for digital RMB placed at the entrance, and various cash registers were adorned with slogans and logos promoting digital RMB. For merchants, using digital RMB has brought great convenience. Cashier Chen Ling told the reporter, "The red envelope consumption activity held in Sanya has encouraged many citizens to try digital RMB payments. Coupled with promotional activities from multiple banks, many citizens use digital RMB here every day. One convenient aspect is that payments can be made normally even in offline mode."

Liu Ting, the finance director of Sanya Hailv Duty-Free City, has been closely monitoring the usage of digital RMB in the store. She expressed her deep feelings, saying, "Using digital RMB is very beneficial for merchants because our daily sales are credited in real-time without transaction fees, saving the transfer process and time, which is favorable for fund flow, especially for small and micro enterprises that need cash flow." Peng Weiwei echoed this sentiment, stating, "Digital RMB settlements are credited instantly, and merchants no longer have to pay third-party fees, which is indeed very economical."

Opening up the market through red envelope distribution and promotional activities is the first step. Collaborating with various resources to build ecological scenarios, extending user engagement time, and cultivating user habits are important follow-up tasks for promoting digital RMB.

Since the beginning of this year, Sanya has focused on major tourism, beautiful countryside, and leisure centers, vigorously promoting the use of digital RMB in tourist attractions, duty-free shopping, rural homestays, large supermarkets, star-rated hotels, and residents' daily consumption. Currently, it has achieved full coverage of four offshore duty-free shops, large supermarkets, and 2A-level and above scenic spots, and is accelerating the implementation of digital RMB in public transportation, natural gas payments, smart campuses, medical education, and other livelihood areas, integrating digital RMB into all aspects of citizens' lives.

Challenges in Promotion

On November 9, Yi Gang, governor of the People's Bank of China, stated in a video speech at the 30th anniversary event of the Bank of Finland's Emerging Market Economies Research Institute that the primary purpose of developing digital RMB is to meet domestic retail payment needs, enhance the level of inclusive financial development, and improve the efficiency of the currency and payment system. To ensure that digital RMB plays an important role, continuing to advance pilot programs is a prerequisite, and the road to promotion is long and arduous.

The reporter felt this deeply during the interview process. Hainan has encountered some challenges in promoting the digital RMB pilot. For example, in Sanya, apart from locations with good implementation, there are still some areas where usage has not taken off. "To promote the use of digital RMB in the store, we placed promotional posters in the lobby and displayed promotional graphics at the front desk. However, since most customers are from outside the area, it seems that digital RMB has not been promoted locally, so the enthusiasm for using digital RMB for payments is low," Peng Weiwei told the reporter. "Only when more people use it will more people be willing to use it."

"Currently, digital RMB can only be linked to debit cards and cannot be linked to credit cards, which makes some young people who are used to credit card consumption reluctant to choose it," Liu Ting said when discussing the difficulties encountered in promotion.

In Bohao Village, although popular homestays have promoted the use of digital RMB, some shops and night markets have not yet opened. Not only in Bohao Village, but many small stalls and shops in Sanya are still blank areas for digital RMB promotion.

Jinji Ling Community is one of the densely populated areas in Sanya. During the reporter's visit to this community, it was hard to find shops that accept digital RMB; most business operators knew very little about what digital RMB is.

By opening the Hainan "Code to Handle Affairs" APP, the reporter found that the Womei Supermarket Jinji Ling store is one of the shops that accept digital RMB through the "Hainan Digital RMB Experience Season" activity webpage of the Bank of China Hainan Branch.

When talking about digital RMB, several cashiers at the supermarket were familiar with it. Customer service supervisor Sun Jiayin told the reporter, "Recently, the red envelope lottery activity and the digital RMB promotion of 20 yuan off 19 yuan by the Bank of China attracted many citizens to participate, and many people came to the supermarket to use digital RMB for consumption. Now that the activity has ended, the number of customers using digital RMB has dropped significantly; sometimes there isn't even one in a day." The reporter noticed that the self-service cash register in the supermarket has not yet opened the digital RMB settlement function. At the manual checkout window, there were almost no customers using digital RMB for payment. One customer told the reporter, "I used digital RMB during the previous activity and found it very convenient. The main reason is that I can't use it in many other places, so I don't use it much."

Through a certain bank's APP, the reporter found a shop that accepts digital RMB. When inquiring about the usage of digital RMB for payments, the shop owner, Chai, was quite puzzled. He stated that bank staff had indeed come to connect with the digital RMB business earlier, but no travelers had ever used it, and he didn't know how to use it.

Continued Efforts Needed

As a new phenomenon, moving from not knowing to knowing, from learning to use to being willing to use, the pilot promotion is just the first step of a thousand-mile journey, and there is still a distance to go before full-scale rollout. The promotion work cannot be accomplished overnight and requires sustained efforts.

According to the reporter's understanding, major banking financial institutions are actively participating in the digital RMB pilot work. During the "Digital RMB · Travel Anywhere" red envelope consumption activity, the Bank of China added five layers of benefits to encourage and invite citizens and tourists to use the Bank of China digital RMB wallet at designated merchants in Sanya, supporting the promotion of digital RMB experiences and red envelope distribution. The Bank of Communications creatively expanded a series of application scenarios in key parks, large commercial areas, tourist attractions, universities, star-rated hotels, and livelihood consumption areas. Especially during the promotion of digital RMB in universities, the largest closed-loop scenario in the province has been successfully tested at Sanya University, where 23,000 faculty and students and nearly 50 online and offline payment application scenarios have been piloted. On this basis, the first digital RMB financial education demonstration base in Hainan Province has also been established. The Postal Savings Bank of China Hainan Branch has collaborated with Meituan to develop digital RMB scenario sub-branches and low-carbon travel.

How can the promotion continue to deepen? A responsible person from the relevant department of the Haikou Central Branch of the People's Bank of China mentioned in a media interview that they will increase the promotion of digital RMB pilot work, regularly distributing digital RMB consumption red envelopes in themed scenarios such as commercial areas, scenic spots, duty-free shops, and public transportation to further enhance the usage frequency of digital RMB and the activity of existing users. Relevant institutions will also actively promote the integration of digital RMB into the retail payment scenarios of the free trade port in a more convenient, secure, and efficient manner. This will deeply integrate digital RMB into daily consumption, public transportation, livelihood services, and medical public services, injecting new vitality into the construction of Hainan's free trade port.

In the future, Sanya will actively and steadily promote the pilot work, combining Sanya's characteristic industries, using "trade finance platform + digital RMB" as a breakthrough, and proactively providing services for the real economy, enhancing the convenience of cross-border capital flows through digital RMB. The pilot work for digital RMB will be advanced in various fields such as fiscal payment topics and urban management credit construction, accelerating the creation of a new engine for digital economic growth in Hainan's free trade port and promoting the concentrated development of financial technology.

Currently, the digital RMB pilot scenarios in Hainan are gradually covering various online and offline fields such as utility payments, dining services, transportation, shopping consumption, and government services. Industry insiders indicate that as application scenarios continue to enrich, more pilot regions will promote digital RMB from point to area, allowing digital RMB to truly enter thousands of households.