Shanghai Securities News: The currency level positioning of digital RMB may change from M0 to M1

According to Foresight News, according to the Shanghai Securities News, a series of policy signals show that the development of digital renminbi has entered a critical transition period from pilot exploration to system improvement. Analysts believe that at present, the M0 (currency in circulation) positioning of the digital renminbi has gradually exposed many limitations in practice, such as the non-interest-bearing feature, which has led to users’ lack of willingness to hold it, and the separation from the bank account system, which has aggravated poor use. Therefore, the transformation to M1 positioning is regarded as the key to solving the above problems.



Liu Xiaochun, deputy director of the Shanghai New Financial Research Institute and deputy director of the China Financial Research Institute of Shanghai Jiao Tong University, said that the two paths he envisions to achieve this transformation include: one is to directly promote the digitization of deposits, convert personal savings and corporate deposits into digital M1, and achieve seamless connection between bank accounts and digital wallets. The other is to add a new exclusive savings form that allows funds to be transferred from existing deposit accounts to digital wallets, but still includes them as liabilities on the commercial bank's balance sheet, with interest calculated at current deposit rates or slightly lower rates.

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