Shenzhen’s Industrial Park Promotes China’s Digital Yuan
The city of Shenzhen in China has established an industrial park to promote the country’s central bank digital currency (CBDC). The park, located in the Luohu district, already houses nine financial companies, including Lakala Payment. To support the development of the digital yuan ecosystem, the district government has announced 10 initiatives and allocated 100 million yuan ($13.7 million) over the next three years. The funds will be used to support the digital economy sector, facilitate payment solutions, promote smart contracts, and encourage e-CNY operations. The establishment of this park is a significant milestone in China’s digital currency development process.
China’s Digital Yuan Progress
In 2019, China launched the digital yuan as a pilot project, and since then, 26 cities have joined the trials with 5.6 million merchants accepting the CBDC as of 2022. By June this year, there had been 950 million e-CNY transactions with a total value of 1.8 trillion yuan. The organizers of the Luohu park aim to attract commercial banks and other specialized entities to build an e-CNY industrial cluster. Startups in the digital yuan business can receive incentives up to 50 million yuan. Enterprises in the park will also enjoy rent-free space for up to three years and access to low-interest loans.
Hot Take: Shenzhen Paves the Way for Digital Yuan Adoption
Shenzhen’s establishment of an industrial park dedicated to promoting China’s digital yuan showcases its commitment to becoming a leading center for CBDC adoption and innovation. By providing financial incentives and support to businesses operating within the park, Shenzhen is creating an environment conducive to the growth of the digital yuan ecosystem. With millions of merchants already accepting the digital yuan and an increasing number of cities participating in trials, China is making significant progress in its CBDC development. The success of initiatives like the Luohu park will contribute to the wider adoption of the digital yuan and pave the way for a cashless future.
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