The central bank has not yet announced the regulations, and the concept of digital currency has taken the opportunity to hype

Source: China Business News

Author: Zheng Yu and Zhang Rongwang

Digital currency is continuing to explode the A-share market, and the digital currency index (884871.WI) has risen by nearly 5% in the past five days.

On August 18, Wintime (300377.SZ) and Yuyin (002177.SZ) closed at the upper limit, while 13 concept stocks including Geer Software (603232.SH) and Xinkaipu (300248.SZ) rose. At the close of the day, Yuyin quickly issued an announcement on abnormal stock trading fluctuations, stating that the cumulative deviation of the closing price increase for three consecutive trading days exceeded 20%. With the general rise of related concept stocks, the digital currency layout of listed companies has once again attracted market attention.

A reporter from China Business News found that as of August 18, 2020, Wind data showed 27 A-share digital currency concept stocks. According to the Shenzhen Stock Exchange Interactive Easy data, investors have asked nearly 300 questions about digital currency in the past month, and more than 3,000 questions about digital currency on the Interactive Easy platform in the past year.

The blockchain person in charge of a banking IT company involved in digital currency concept stocks told reporters, "The central bank's digital currency specifications have not been released. The company is currently doing basic preparations for the central bank's digital currency and waiting for the central bank to release the specifications in the future. The company will look for opportunities to participate as soon as possible." Public information shows that the company has been influenced by the concept of digital currency and has recorded multiple daily limit increases since July.

Hot concept

On August 14, the Ministry of Commerce issued the "Overall Plan for Comprehensively Deepening the Pilot Program for Innovative Development of Trade in Services", stating that it will carry out a pilot program for the digital RMB. In the "Tasks, Specific Measures and Division of Responsibilities for Comprehensively Deepening the Pilot Program for Innovative Development of Trade in Services", it was proposed that the digital RMB pilot program be carried out in Beijing-Tianjin-Hebei, the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area and other qualified pilot areas in the central and western regions. The People's Bank of China will formulate policy safeguards; first, Shenzhen, Chengdu, Suzhou, Xiong'an New Area and other places and relevant departments of the future Winter Olympics scene will assist in the promotion, and then expand to other regions as appropriate.

The pilot areas for comprehensive deepening are 28 provinces, cities and regions, including Beijing, Tianjin, Shanghai, Chongqing (21 districts including Fuling District), Hainan, Dalian, Xiamen, Qingdao, Shenzhen, Shijiazhuang, Changchun, Harbin, Nanjing, Hangzhou, Hefei, Jinan, Wuhan, Guangzhou, Chengdu, Guiyang, Kunming, Xi'an, Urumqi, Suzhou, Weihai, Xiongan New Area in Hebei, Gui'an New Area in Guizhou, and Xixian New Area in Shaanxi.

On the day the overall plan was released, the digital currency index rose by 2.81%. As of the close of August 18, the digital currency index had risen by 7.4%. Wind showed that in the three consecutive trading days after the release of the above notice (August 14, 17, and 18), the trading volume of digital currency concept stocks was 573 million, 834 million, and 707 million, and the transaction amount was 8.67 billion yuan, 12.4 billion yuan, and 10.8 billion yuan.

Minsheng Securities Research Report believes that these good news will bring relevant investment opportunities to the digital currency industry chain. "Focus on the continuous advancement of digital currency, and the banking IT field has ushered in good news. The pilot is expected to be launched among the five major banks first. After the successful experiment in the four pilot cities, it is expected to be popularized in more cities in the four regions of Beijing-Tianjin-Hebei, Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area and central and western China in the short and medium term, which will bring important changes to the payment ecosystem in the long run. From the positive point of view, in the short and medium term, banks in pilot cities need to carry out relevant system transformation and add corresponding modules, including digital currency wallets, etc. Therefore, with the popularization of digital currency, banking IT companies are expected to usher in construction increments. In the long run, when digital currency is fully popularized, a new core system based on digital currency is expected to be formed in the bank, which will bring greater increments to the entire banking IT industry. Overall, we are optimistic about the benefits of the banking IT field under the popularization of digital currency, which is expected to bring actual performance increments in the medium and long term, and upstream security, downstream hardware and other fields are also expected to continue to benefit."

Can we get on the digital currency express train?

After studying the relevant announcements of the above-mentioned 27 digital currency concept stocks and their interactions with investors, the reporter found that most of them emphasized their own strength and understanding ability. From the public information, no company has stated that it has participated in the research and development of the central bank's digital currency or possesses digital currency technology.

When faced with investors' questions about whether the company has digital currency technology and why it was listed as a digital currency stock by relevant software, Xinchen Technology (300542.SZ) only stated that the company has long cultivated a team of talents with IT technology, financial business knowledge and industry management experience, and has the ability to understand and rich implementation experience in financial information system development.

Zhongying Internet (002464.SZ), another digital currency concept stock, clearly stated that it did not participate in the central bank's digital currency research and development or internal testing, and was only actively preparing for the European virtual currency exchange. In April this year, Diweixun (300167.SZ) also stated on the Interactive Yi platform that it had no digital currency technology research and development.

The reporter also noticed that one of the bank IT service providers, whose stock price hit the daily limit several times due to the popularity of the digital currency sector, only had a virtual currency wallet as its "digital currency" related product.

"It is still unknown what technology the central bank's digital currency will adopt, and the market cannot equate blockchain with the central bank's digital currency. However, one of the company's original intentions for making a Bitcoin wallet is to make basic preparations for the central bank's digital currency. We make hardware wallets not only for the Bitcoin, Ethereum and other token markets, but also to lay some foundations and preparatory work for the country's future legal digital currency. However, the actual implementation still depends on the actions and rhythm of the central bank." A relevant person in charge of a digital currency concept stock explained.

The above-mentioned person in charge said that as of now, the specifications of the central bank's digital currency have not been released, and the institutions involved in the design of the central bank's digital currency are also kept confidential. Once the central bank's digital currency specifications are released, the company will definitely actively look for opportunities to participate based on the project implementation and market development. If the company's current technology is close to the specifications released by the central bank in the future, the company, as a hardware supplier serving commercial banks for many years, should have the opportunity to participate in the digital currency projects of various major banks. "At this stage, except for official news, I don't think any company that says it is involved in the central bank's digital currency project is credible."

Scholars who have long studied the field of digital currency also stated that objectively speaking, there is no direct connection between virtual currency and central bank digital currency.