Summary of Conference Call on Digital Currency Developments Industry Overview - The conference call focused on the developments in the digital currency sector, particularly the digital renminbi (RMB) in China, highlighting the importance of its underlying financial infrastructure and recent policy changes by the People's Bank of China (PBOC) [3][5]. Key Points and Arguments 1. **Policy Changes and Emphasis on Digital RMB** - The PBOC has emphasized the steady development of digital RMB as a key goal, with several important policies introduced, including revisions to the cross-border payment system rules and financial support for infrastructure projects [3][5]. 2. **Company's Early Involvement and Advantages** - The company has a first-mover advantage in the digital RMB space, having participated in system construction since 2016, covering various business scenarios including corporate and personal applications [5][6]. 3. **Implementation in Existing Institutions** - The implementation of digital RMB in existing institutions involves transitioning off-balance sheet assets to on-balance sheet, with the company deeply involved in over 30 system renovation projects for major state-owned banks [7]. 4. **Focus on Cross-Border Payments** - Future development of digital RMB will prioritize cross-border payments, integrating with SWIFT to enhance efficiency and reduce costs, positioning it as a primary channel for cross-border transactions [8]. 5. **Investment Projections** - Each new operating institution is expected to increase R&D investment by approximately 1,000 person-months, with some banks projected to invest over 50 million yuan per project, indicating a sustained high level of investment from the company [9]. 6. **Transition to Digital RMB 2.0** - The transition from M0 (cash) to M1 (deposits) in digital RMB 2.0 allows it to enter banks' balance sheets, impacting their liabilities and incentivizing banks to promote its use [10]. 7. **Technological Enhancements** - Digital RMB 2.0 incorporates blockchain technology and a dual-layer operational architecture, improving security and efficiency, particularly in cross-border payments [12]. 8. **Competitive Advantages Over Existing Payment Tools** - Unlike WeChat and Alipay, which serve primarily as payment channels, digital RMB offers a complete account system and is expected to expand its application scenarios domestically and internationally, especially along the Belt and Road Initiative [13]. 9. **Government Incentives for Adoption** - The government has implemented various incentives to promote digital RMB usage, including assessments of banks based on account openings and deposit balances, which are expected to drive transaction volume and necessitate system upgrades [14]. Additional Important Content - The company is actively involved in the transformation of banking systems to accommodate digital RMB, which is expected to enhance user experience and financial institutions' willingness to adopt the currency [12][14].

Investment Rating - The industry investment rating is "Overweight" indicating a positive outlook for the digital currency sector compared to the overall market performance [8]. Core Insights - The People's Bank of China has introduced an action plan to enhance the management and service system for digital currency, set to be implemented on January 1, 2026. This plan redefines digital currency from M0 to M1, integrating it into the reserve system and allowing interest payments on digital currency wallet balances [2]. - The action plan emphasizes a hybrid model combining account-based management and blockchain efficiency, highlighting the importance of compliance and regulation [2]. - With the M1 positioning, both individuals and commercial banks are incentivized to adopt and promote digital currency, enhancing its security and convenience compared to traditional electronic payments [2]. - The government is actively promoting cross-border digital currency payments, with initiatives such as the establishment of an international operation center in Shanghai and the launch of a cross-border digital payment platform [2]. - Various local governments are implementing measures to encourage the use of digital currency, such as issuing coupons and integrating it with cultural activities, indicating a strong push towards building a digital currency ecosystem [2]. Summary by Sections Regulatory Developments - The central bank's action plan includes integrating digital currency into the reserve system, allowing banks to pay interest on digital currency wallet balances, thus treating it similarly to deposits [2]. Market Dynamics - The shift to M1 is expected to motivate banks and individuals to engage more with digital currency, enhancing its usability and attractiveness [2]. Government Initiatives - The government is focusing on cross-border payment solutions and has launched several platforms to facilitate digital currency transactions, aiming to reduce transaction times significantly [2]. Related Companies - Companies involved in the digital currency ecosystem include those updating banking IT systems (e.g., Newland, Sifang Jingchuang), promoting payment solutions (e.g., Lakala), and hardware wallet providers (e.g., GDT, Feitian Integrity) [2][3].

Core Viewpoint - The People's Bank of China has revised the "Rules for Cross-Border Payment System of Renminbi" to adapt to the rapid development of the Cross-Border Interbank Payment System (CIPS), which will take effect on February 1, 2026, replacing the 2018 version [1][2]. Group 1: Regulatory Changes - The revised rules aim to better accommodate the expansion and management needs of CIPS participants, ensuring that the regulatory framework remains forward-looking and scientifically sound [2][4]. - The new rules specify detailed processes for account management, funding, and settlement for CIPS participants, reflecting the ongoing optimization of CIPS functions and services [2][3]. Group 2: CIPS Participant Structure - CIPS participants are categorized into direct and indirect participants, with direct participants holding CIPS accounts and having a CIPS identification number [3]. - Each direct participant is allowed to open only one zero-balance account, which does not accrue interest or allow overdrafts, ensuring that the account balance remains zero at the end of each day [3][4]. Group 3: Digital Currency Integration - The new rules include provisions for digital currency research, indicating a strategic focus on integrating digital currency into the cross-border payment framework [5]. - The digital renminbi is being actively developed for cross-border payments, with the establishment of the Digital Renminbi International Operation Center in Shanghai, which aims to enhance cross-border financial infrastructure [6][7]. Group 4: International Cooperation and Expansion - CIPS currently has 190 direct participants and 1,567 indirect participants, with a significant presence in Asia, Europe, and other regions, indicating a broad international engagement [8]. - The recent launch of the CIPS Hong Kong access point aims to reduce costs for overseas institutions seeking to utilize CIPS services, reflecting a commitment to enhancing global access [8].

Core Viewpoint - The company is actively exploring opportunities in cross-border payment functionalities related to digital RMB, while acknowledging that the development of new features will require time and resources [1] Group 1: Company Initiatives - The company has been closely monitoring policies and innovative business scenarios related to digital RMB cross-border payments [1] - The company is enhancing its cross-border payment brand PayKKa through increased resource investment, product development, and banking channel construction [1] - The company is optimizing B2B and B2C cross-border payment capabilities and expanding local account coverage in key regions including the US, Canada, UK, EU, Australia, Singapore, Hong Kong, Indonesia, Philippines, Thailand, and Vietnam [1] Group 2: Product Development and Achievements - PayKKa has successfully facilitated payments for clients on major e-commerce platforms such as Amazon, Etsy, Lazada, Shopee, and TikTok [1] - The company has launched a global acquiring product for independent sites and is strengthening partnerships with acquiring banks and institutions to expand support scenarios [1] - In the first half of the year, the number of merchants and transaction amounts in the company's cross-border payment business experienced rapid growth, with Q2 showing a 169% increase in merchant numbers and a 272% increase in transaction amounts compared to Q1 [1]

Core Viewpoint - The company is actively monitoring policies and innovations related to digital RMB cross-border payments, aiming to develop new business opportunities while acknowledging that research and development will require time [1] Group 1: Company Initiatives - The company has been increasing its resource investment in its cross-border payment brand, PayKKa, focusing on product development and building banking funding channels [1] - The company is preparing its capabilities in products, technology, and compliance based on regulatory frameworks to support its business development efforts [1] Group 2: Industry Context - The company emphasizes the importance of aligning with regulatory frameworks in the evolving landscape of digital currency and cross-border payment solutions [1]

Core Viewpoint - The People's Bank of China and seven other departments have issued the "Opinions on Financial Support for Accelerating the Construction of the Western Land-Sea New Corridor," proposing over 20 measures to support the high-quality development of this corridor [1][2] Group 1: Financial Support Measures - The Opinions aim to promote high-level financial openness and support the economic and trade development of the Western Land-Sea New Corridor [1] - It optimizes the cross-border settlement facilitation system, encouraging domestic financial institutions to strengthen agency settlement and clearing cooperation with financial institutions in Southeast Asia, Central Asia, and Hong Kong and Macau [1] Group 2: International Financial Cooperation - The Opinions support the introduction of foreign financial institutions and organizations, allowing banks from ASEAN and Hong Kong and Macau to provide financial services in relevant provinces through new legal entities, branches, or specialized institutions [1] - It encourages international financial centers and qualified foreign exchanges to establish representative offices in relevant provinces [1] Group 3: Digital Currency and E-commerce - The Opinions support participation in the multilateral central bank digital currency bridge project, promoting cross-border payments using central bank digital currencies with countries like Thailand, Hong Kong, UAE, and Saudi Arabia [2] - It also supports the exploration of a digital renminbi cross-border payment pilot with Singapore and the construction of cross-border e-commerce digital service platforms in qualified provinces [2]

12月25日，中国人民银行举行新闻发布会，介绍金融支持加快西部陆海新通道建设有关情况。中国人民 银行重庆市分行党委书记、行长姚力在谈及前期成效时表示，人民银行重庆市分行会同相关部门、金融 机构积极作为，重点推进金融支持西部陆海新通道全域开放八项标志性成果。 21世纪经济报道记者 唐婧 北京报道 《意见》明确，发挥数字人民币支付即结算、低成本、可编程等优势，研究利用数字人民币智能合约打 造创新解决方案，探讨拓展数字人民币在通道支付结算、融资、退税等场景中应用的可行性。研究扩大 数字人民币跨境应用地区范围，利用双边和多边跨境业务模式为通道跨境支付降本增效。 此前，中国人民银行等八部门印发《关于金融支持加快西部陆海新通道建设的意见》（以下简称《意 见》），从扩大人民币跨境使用等方面提出21条重点举措，推动发挥好"融资"和"结算"两项金融核心功 能，支持西部陆海新通道高质量发展。 姚力表示，其中第八项成果是实现"一个突破"，开辟数字人民币跨境支付新路径。依托多边央行数字货 币桥和中新双边数字人民币试点，推动数字人民币在跨境结算中实现新突破，为企业带来"秒级到账"的 结算新体验。 ...

Core Viewpoint - The People's Bank of China (PBOC) will hold a press conference on December 25 to discuss financial support for accelerating the construction of the Western Land-Sea New Corridor, with key officials including Deputy Governor Lu Lei in attendance [1]. Group 1: Financial Support Measures - The PBOC, along with several government departments, has issued the "Opinions on Financial Support for Accelerating the Construction of the Western Land-Sea New Corridor," which includes 21 key measures aimed at enhancing financial services for the corridor's development [1][2]. - The measures focus on improving the financial organizational collaboration system, constructing a high-quality capital circulation system, promoting institutional reforms, building a digital financial service platform, enhancing financial openness and cooperation, and deepening cross-provincial and cross-border financial regulatory collaboration [1]. Group 2: Specific Initiatives - The "Opinions" encourage financial institutions to establish special service mechanisms at their headquarters, providing preferential treatment in client access and credit approval, and exploring integrated credit mechanisms for branches in the corridor [1]. - The document emphasizes the use of diversified financing channels, including corporate credit bonds, Real Estate Investment Trusts (REITs), and project loans, to meet the funding needs of various construction projects [1]. - A fund will be established in Chongqing to support infrastructure and industrial park construction along the corridor [2]. Group 3: Digital Currency and Cross-Border Cooperation - The initiative supports participation in multilateral central bank digital currency bridge projects and promotes the use of central bank digital currencies for cross-border payments with countries such as Thailand, Hong Kong, UAE, and Saudi Arabia [2]. - There are plans to explore a pilot program for cross-border payments using digital renminbi between mainland China and Singapore [2].

Group 1 - The core viewpoint of the news is the strong performance of the financial technology sector, highlighted by the rise of the China Securities Financial Technology Theme Index and its constituent stocks, driven by supportive government policies for digital currency and cross-border payment initiatives [1][2] Group 2 - As of December 25, 2025, the China Securities Financial Technology Theme Index (930986) increased by 1.04%, with notable gains from stocks such as Lakala (300773) up 5.43%, Sifang Jingchuang (300468) up 5.25%, and Nantian Information (000948) up 3.97% [1] - The People's Bank of China and eight other departments released an opinion on December 24, supporting the construction of the Western Land-Sea New Corridor and promoting the use of central bank digital currencies in cross-border payments with countries like Thailand, Hong Kong, UAE, and Saudi Arabia [1] - The digital renminbi is expected to accelerate penetration across the industrial chain, with significant growth potential in the banking IT and financial technology sectors, as well as in downstream payment ecosystems [2] - The top ten weighted stocks in the China Securities Financial Technology Theme Index account for 53.31% of the index, with companies like Tonghuashun (300033) and Dongfang Caifu (300059) among the leaders [2]

Group 1 - The People's Bank of China, along with several government agencies, issued an opinion to support the construction of the Western Land-Sea New Corridor [1] - The opinion emphasizes the exploration of digital financial international cooperation, particularly in cross-border payment systems using central bank digital currencies (CBDCs) [1] - It supports pilot projects for cross-border payments with countries such as Thailand, Hong Kong, UAE, and Saudi Arabia, as well as a digital RMB pilot with Singapore [1] Group 2 - The opinion encourages the development of cross-border e-commerce digital service platforms in certain provinces, aiming to enhance service capabilities in collaboration with digital platforms from countries like Singapore [1]