China has opened its first industrial park dedicated to developing the digital yuan ecosystem, also known as the e-CNY. The industrial park, located in Shenzhen's Luohu district, aims to support the development of digital yuan-related initiatives, including payment solutions, smart contracts, hard wallets, and digital yuan promotion. Incentives for residents include up to three years of free rent and access to loans at advantageous rates. Commercial banks can receive up to CNY 20 million, while startups are eligible for up to CNY 50 million in government support. The digital yuan is currently in the pilot stage, with 26 participating cities and 5.6 million merchants accepting it.
China Launches Industrial Park for Digital Yuan Ecosystem Development
China has taken a significant step in the development and promotion of its digital currency, the digital yuan, also known as the e-CNY. The country has opened its first industrial park dedicated to fostering the digital yuan ecosystem in the Luohu district of Shenzhen, situated near Hong Kong.
Key highlights of the newly established industrial park for the digital yuan ecosystem:
Purpose: The industrial park is exclusively focused on advancing the development and adoption of the digital yuan, China's central bank digital currency (CBDC).
Initial Residents: The park has welcomed its first batch of nine residents, including payment solution providers, smart contract developers, hard wallet creators, and entities promoting the digital yuan.
Government Initiatives: The district government has introduced ten initiatives aimed at accelerating the growth of the digital yuan ecosystem. These initiatives encompass various aspects, including payment solutions, smart contracts, hard wallets, and the promotion of the digital yuan.
Incentives: The government is providing attractive incentives to residents who join the industrial park, including up to three years of rent-free facilities. Commercial banks settling in the park can receive a maximum of 20 million yuan (approximately $2.7 million) in support, while startups can access up to 50 million yuan (around $6.9 million). The government's total support is capped at 100 million yuan (about $13.7 million). Additionally, loans at favorable rates are available.
Prominent residents among the initial nine participants in the industrial park include Hengbao and Wuhan Tianyu Information, which are involved in payment card production, among other activities. Lakala Payment, a payments processor and a partner of Visa, is also among the initial residents.
Wuhan Tianyu Information's Executive Deputy Director, Zeng Zhaoxiang, expressed the hope of achieving synergistic effects within the digital yuan industrial chain, contributing to the park's development.
China has been actively promoting the adoption of the digital yuan, which remains in the pilot phase. Currently, 26 cities are participating in the pilot, and the digital yuan is accepted by 5.6 million merchants. The government's encouragement, technological advancements, and initiatives like this industrial park aim to further drive the adoption and usage of the digital yuan.
The digital yuan app recently introduced the option for tourists to add funds using Visa and Mastercard, enhancing its usability. However, despite these efforts, digital yuan adoption is considered gradual, with approximately 261 million digital yuan wallets created as of 2022.
Additional Information:
The industrial park's establishment is aligned with China's efforts to lead in the development of central bank digital currencies (CBDCs) and promote the use of the digital yuan on a larger scale.
The launch of the digital yuan industrial park in Shenzhen is a significant move aimed at fostering innovation, research, and development related to the digital currency.
The digital yuan is still in its pilot stage, and the Chinese government continues to expand its use across various regions.
The use of digital yuan, coupled with incentives and efforts to increase acceptance by merchants and businesses, is intended to create a thriving ecosystem around China's CBDC.
(DEREK ANDERSEN, COINTELEGRAPH, 2023)