The Relationship Between the People's Bank of China and the Renminbi: Dissecting Its Roles in Issuance, | Gu Jin Jian Bao

I. The Authoritative Issuer of RMB: The Cornerstone of the National Monetary System

As the legal currency authority of the People's Republic of China, the People's Bank of China bears the important responsibility of designing, printing, and issuing the Renminbi (RMB). Since its establishment on December 1, 1948, and the issuance of the First Series of RMB, the central bank has continuously improved and upgraded its monetary system over more than fifty years, having issued five series of RMB to date. This not only includes banknotes and metal coins in daily circulation but also extensively covers ordinary commemorative coins and precious gold and silver commemorative coins with specific themes and limited editions.

1. The Birth of the RMB Series:

• First Series of RMB: Issued on December 1, 1948, it consisted of 12 denominations and 62 varieties, aiming to usher in the national liberation, eliminate the currency of the Kuomintang government, and end the long-term inflation and circulation of foreign currencies, gold, and silver coins.
• Second Series of RMB: Began circulation on March 1, 1955, exchanged with the First Series of RMB at a ratio of 1:10000. This series of RMB showed significant improvements in design themes and printing technology, adopting intaglio printing techniques with unique national characteristics and anti-counterfeiting features. Some large denomination banknotes were even printed by the Soviet Union.
• Third Series of RMB: Issued on April 20, 1962, it had 7 denominations and 13 varieties. The banknote designs largely reflected the national economic policy of the time, which was based on agriculture and led by industry. Its printing technology inherited and developed the advantages of the Second Series of RMB.
• Fourth Series of RMB: To meet the development needs of reform and opening-up and facilitate circulation and transaction accounting, the People's Bank of China began publicly issuing the Fourth Series of RMB on April 27, 1987. This series included 9 denominations and 14 types of banknotes. Compared to the Third Series, it added two large denominations of 50 yuan and 100 yuan. Furthermore, on August 20, 1992, 1990 edition 50 yuan and 100 yuan banknotes were issued, adding security threads to enhance anti-counterfeiting. The central bank spent 18 years planning and designing the Fourth Series of RMB, from the initial proposal in January 1967 to its finalization in May 1985, demonstrating considerable effort.
• Fifth Series of RMB: To celebrate the 50th anniversary of the founding of the People's Republic of China, the People's Bank of China began issuing the Fifth Series of RMB sequentially from October 1, 1999. Based on market circulation demands, this series eliminated the 2 yuan denomination and added a 20 yuan denomination, making the denominational structure more rational. Its anti-counterfeiting performance and adaptability to modern currency processing were significantly improved, with new versions issued in 2005, 2015, and 2019, continuously strengthening anti-counterfeiting technology.

2. Special Issuance of Commemorative Coins/Banknotes: Since 1984, the central bank has issued 63 sets of 75 ordinary commemorative coins (and banknotes), with a total issuance of approximately 850 million pieces. These commemorative coins are rich in themes and uniquely designed, not only enriching China's monetary system but also promoting Chinese monetary culture.

II. The Strict Manager of RMB: Precise Control from Circulation to Delisting

The People's Bank of China manages the RMB throughout its entire lifecycle, from initial design concepts and printing technology to circulation, and finally to its cessation of circulation and exchange.

1. Design and Anti-Counterfeiting Innovation:

• Design Philosophy and Style: The Fourth Series of RMB achieved innovation and breakthroughs in design. The main design motifs primarily embodied the theme of ethnic unity in building socialism with Chinese characteristics under the leadership of the Communist Party of China. The back of the main banknotes featured famous Chinese scenic spots, mountains, and rivers. For example, the front of the 100 yuan note featured relief sculptures of four leaders: Mao Zedong, Zhou Enlai, Liu Shaoqi, and Zhu De, with the main peak of Jinggangshan on the back; the front of the 50 yuan note featured portraits of workers, farmers, and intellectuals, with the Hukou Waterfall of the Yellow River on the back.
• Leading Anti-Counterfeiting Technology: The central bank strived for excellence in printing technology. The main motifs all featured large portrait watermarks, and the engraving process was complex. The banknote paper used full-page watermarks and fixed portrait watermarks to enhance anti-counterfeiting capabilities. The Fourth Series of RMB was also a pioneer in Chinese fluorescent currency, utilizing colorless fluorescent ink and other advanced anti-counterfeiting technologies, aligning with international standards and marking China's entry into the ranks of advanced countries in banknote printing technology. The Fourth Series of RMB first incorporated braille, which was also a milestone in Chinese banknote design and production.
• Adjustment of Denominational Structure: Based on market circulation demands, the central bank adjusts the denominational structure of the RMB as appropriate. For example, the Fifth Series of RMB added a 20 yuan denomination and eliminated the 2 yuan denomination, making the denominational structure more rational.

2. Management of Ceasing Circulation and Exchange:

• Delisting Announcement: With the approval of the State Council, the People's Bank of China issued an announcement on March 20, 2018, deciding that starting from May 1, 2018, the 100 yuan, 50 yuan, 10 yuan, 5 yuan, 2 yuan, 1 yuan, 2 jiao paper banknotes and 1 jiao coin of the Fourth Series of RMB would cease to circulate in the market. This means that these denominations would no longer have legal tender status.
• Exchange Arrangements: The central bank set a concentrated exchange period for holders, from May 1, 2018, to April 30, 2019. During this period, citizens could exchange them at the business outlets of various banking financial institutions. After the concentrated exchange period, exchanges could still be made at banks selected by the People's Bank of China branches. The Ningxiang branch of the People's Bank even reminded residents to promptly exchange damaged RMB with poor condition and low collection value.
• Circulation of Certain Denominations: It is important to note that the 5 jiao and 1 jiao paper banknotes and the 1 yuan and 5 jiao coins of the Fourth Series of RMB are currently still in circulation, and no entity or individual may refuse them.

III. The Indirect Guide of the Collection Market: The Shaper of Value Trends

Although the People's Bank of China does not directly participate in the collection and sale of RMB, its issuance and management measures for the RMB profoundly influence the direction of the collection market and the valuation of collectibles.

1. Delisting: Creating a Cradle for Collectibles: Whenever a series of RMB exits the circulation market, its scarcity rapidly increases, making it a sought-after item in the collection market. For example, as soon as the news of the Fourth Series of RMB ceasing circulation was announced, prices in the collection market immediately rose, with overall prices increasing by approximately 30% after the announcement compared to before. Among them, the 1980 edition 50 yuan banknote, due to its rare issuance, multiple revisions, and destruction, is hailed as the "king of banknotes" of the Fourth Series. A single well-preserved piece once reached over RMB 2,000 (approximately HKD 2,160), an increase of over 40 times its face value. The 1980 edition 100 yuan banknote had a market price of about RMB 1,000 (approximately HKD 1,080) per piece. The "Green Diamond" in the 1980 edition 2 yuan banknote (named for its green fluorescence under UV light) once increased in price by about 30 times, to approximately RMB 60 (approximately HKD 64.8).

2. Condition and Scarcity: Key Determinants of Value: Collection experts emphasize that the collection value of delisted RMB primarily depends on its condition. Worn and damaged RMB that have been in circulation have low collection value, and even slight folds can halve the value of a poor-condition banknote. Additionally, consecutive banknotes in bundles, packs, or rolls are often more valuable than loose single pieces, and special serial numbers and matching number collections are also market hotspots.

3. Anti-Counterfeiting Technology and Cultural Connotation: Intangible Value Enhancement: The advanced anti-counterfeiting technologies incorporated by the central bank into RMB designs, such as special fluorescent banknotes like "Blue Sky and White Sun," "Auspicious Clouds," "China Red," "Green Ghost," and "Golden Dragon King" resulting from fluorescent anti-counterfeiting tests, are highly sought after by collectors due to their uniqueness and rarity. They possess high aesthetic and collection value. Simultaneously, the historical significance, cultural connotation, and artistic value carried on the banknotes, such as portraits of various ethnic figures and famous mountains and rivers, add profound cultural depth to the collectibles, making them transcend mere monetary function and become witnesses to history and carriers of art.

4. Beware of Market Risks: Officials from the People's Bank branches have also reminded the public that collecting and investing in delisted RMB carries certain risks, and one should approach it rationally and avoid blindly following trends. It is crucial to beware of illegal elements using false information such as "special serial numbers," "misprinted currency," "high-price buybacks," "limited editions," and "authoritative certifications" for fraud. Choosing legitimate channels for purchases and having the knowledge to distinguish genuine from counterfeit is vital.

In summary, the People's Bank of China is the highest authority for the Renminbi. Every aspect, from its design, printing, and issuance to its circulation and withdrawal, has a decisive impact on the RMB's historical status, artistic value, and collection value. For"Gu Jin Jian Bao,"a deep understanding of the central bank's role and policies is the cornerstone of our professional appraisal, reasonable Buyback, and providing value assurance to collectors.

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