Study On Impact Of Digital RMB On Commercial Banks’ Business Performance And Response Strategies

With the rapid development of network and information technology,the form of currency has gradually evolved towards electronic and digitalization.In recent years,many central banks in the world have accelerated the progress of research on digital currency,and according to the survey report of 65 central banks in the world on digital currency published by the Bank for International Settlements,86% of central banks are actively researching digital currency by the end of 2020,about 1/3 more than four years ago.China also keeps pace with the construction of digital economy system and actively develops China’s central bank digital currency: digital RMB.As an important financial intermediary in China’s economic operation,the launch of digital RMB will certainly have a great impact on it.Facing the development of the new digital currency,how to seize the opportunity to meet the challenge has become an urgent problem for the banking industry.Based on this,this thesis studies the impact of digital RMB on the business performance of commercial banks in China,so as to provide relevant countermeasures and suggestions for the transformation and development of China’s banking industry,and the research on this issue is of great practical significance.The authors combs through relevant domestic and international literature and uses theoretical analysis and empirical research methods to investigate the impact of digital RMB on the business performance of commercial banks.Firstly,the generation of central bank digital currency and the current development of central bank digital currency at home and abroad are described,followed by an overview of the concept,characteristics,and operational structure of digital RMB,and a comparison between digital RMB and other types of currencies is made.Secondly,the impact of digital RMB on various business areas of commercial banks is analyzed at the theoretical level.Again,in terms of empirical analysis,the thesis uses factor analysis to measure the business performance of commercial banks in China in four dimensions:profitability,liquidity,safety and growth,followed by regression analysis.Finally,relevant conclusions are drawn and response strategies are proposed for commercial banks.The theoretical analysis of the thesis finds that digital RMB can reduce banks’ cash operation costs,break the barriers in retail and mobile payment markets,help banks transform and develop their payment and settlement business,improve banks’ credit risk control,and promote the development of banks’ cross-border and inclusive business.At the same time,it also brings a certain degree of challenges to commercial banks,such as cutting card payment and settlement revenue,reducing banks’ savings and lending scale,and affecting commercial banks’ credit expansion ability.The empirical study of the thesis finds that the change of currency structure after the issuance of digital RMB adversely affects the business performance of commercial banks.Combined with this research,it proposes countermeasures related to balancing the relationship between digital RMB and deposits,enhancing customer stickiness by using digital RMB,accelerating the business layout of GBC’s three-terminal "digital platform",increasing financial technology capital and human investment,building an "intelligent,wholeprocess" risk monitoring system,and expanding "diversified,high value-added" businesses.