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China Opens Digital Yuan Park in Shenzhen


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China Opens Digital Yuan Park in Shenzhen

Shenzhen has become home to an industrial park established to promote China’s central bank digital currency (CBDC). Several financial companies are already settling there, the Chinese megacity announced while unveiling almost a dozen initiatives to boost the digital yuan use in the region.

Shenzhen to Invest $14 Million in 3 Years to Develop Digital Yuan Ecosystem

The city of Shenzhen, a global center for technology, manufacturing, and finance in the Chinese Guangdong province, has launched the country’s first business and industrial park for the purpose of promoting China’s CBDC.

The digital yuan (e-CNY) park is located in the city’s Luohu district, reported the China Internet Information Center (China.org.cn). Nine financial companies, including the fintech platform Lakala Payment, have already set up offices there, according to the state-run portal.

The district government announced 10 initiatives to back the development of the local digital yuan ecosystem. A total of 100 million yuan ($13.7 million) will be allocated to the realization of the plan over the course of the next three years.

The funds will be used to support the digital economy sector, facilitate payment solutions across various industries as well as to promote the implementation of smart contracts and encourage e-CNY operations. Huang Tuo, head of the Luohu financial services department, commented:

The establishment of China’s first such park marks a significant milestone in the nation’s digital currency development process.

China launched the digital yuan as a pilot project in 2019 and since then 26 cities have joined the trials with 5.6 million merchants accepting the CBDC as of 2022. By the end of June this year, the total number of e-CNY transactions had reached 950 million, with a total value of 1.8 trillion yuan.

The organizers of the Luohu park hope to attract branches of commercial banks working with the digital currency system and other specialized entities to build an e-CNY industrial cluster. Startups in the digital yuan business can receive incentives of up to 50 million yuan. All enterprises establishing presence in the park will be able to take advantage of rent-free space for up to three years and apply for loans with low interest rates, the report noted.

Do you think China will create more digital yuan industrial parks in other cities? Tell us in the comments section below.

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