Summary of Conference Call on Digital Renminbi 2.0 by Zhongke Jiangnan Industry Overview - The conference call focused on the transition of Digital Renminbi from version 1.0 to 2.0, emphasizing its impact on government fund management and the integration of blockchain technology and smart contracts into the financial system [3][4]. Key Points and Arguments 1. **Transition from Cash to Account System**: The shift from a cash-based system to an account-based system in Digital Renminbi 2.0 resolves conflicts with existing fiscal systems, enhancing fund management efficiency [3][4]. 2. **Integration of Blockchain and Smart Contracts**: Digital Renminbi 2.0 incorporates blockchain technology and smart contracts, improving fund supervision, traceability, and precise disbursement capabilities [4][5]. 3. **Market Growth Potential**: The market size for Digital Renminbi applications is expected to multiply, driven by the integration of smart contracts in various government funding areas, including state investment funds and agricultural subsidies [4][6]. 4. **Revenue Generation**: Zhongke Jiangnan has generated approximately 6-7 billion in revenue from electronic payment projects since 2011, with expectations for significant growth as the Digital Renminbi ecosystem expands [6][13]. 5. **Collaboration with Banks**: The company collaborates with banks to implement smart contracts, enhancing the efficiency of fund management and ensuring compliance with fiscal regulations [6][19]. 6. **Implementation Timeline**: Starting January 1, 2026, large state-owned enterprises and banks will upgrade their wallets to accounts, with pilot cities like Suzhou aiming for a Digital Renminbi fund scale exceeding 500 billion [9][14]. 7. **AI Integration**: The company is actively integrating AI into fiscal data management, enhancing operational efficiency through automated processes like smart auditing and report generation [9][10]. 8. **Smart Auditing Mechanism**: Smart auditing utilizes historical and macroeconomic data to assess the necessity and compliance of fiscal operations, enabling precise fund disbursement and oversight [10][11]. 9. **Future Developments**: The Ministry of Finance shows a strong willingness to overhaul the centralized treasury payment system, integrating Digital Renminbi and smart contract technologies into existing frameworks [10][14]. 10. **Scalability of Digital Renminbi 2.0**: The implementation of Digital Renminbi 2.0 is expected to significantly increase the scale of electronic payments, with potential growth from 6-7 billion to several times that amount [13][15]. Additional Important Insights - **Exclusivity and Competitive Advantage**: Zhongke Jiangnan has established a secure and efficient platform for smart contracts, creating a natural competitive advantage in the market [7][8]. - **Role of Digital Renminbi in Government and Banking Collaboration**: The fiscal department leads the application of Digital Renminbi in government funding, determining which funds are managed through this system [19][21]. - **Long-term Market Opportunities**: The transition to Digital Renminbi 2.0 is expected to create sustained market opportunities, addressing previous inefficiencies in version 1.0 and promoting broader adoption [21][22].