By
Godfrey Benjamin
April 26th, 2024
Currently, there are nine residents of the park. All of them will get access to ten government initiatives introduced to “boost the development” of the digital yuan ecosystem. The initiatives include payment solutions, smart contracts, hard wallets, and digital yuan promotion.
The first industrial park has been opened in the Luohu district of Shenzhen, China, with a focus on developing China’s Central Bank Digital Currency (CBDC) – digital yuan or e-CNY. The official launching ceremony of the park was held on October 11.
As was revealed by Shu Yumin, the Communist Party Secretary of the Shenzhen Financial Supervision Bureau, the aim of the industrial park is to “help promote the further improvement and expansion” of the e-CNY pilot work as well as bring Shenzhen closer to becoming a “global financial technology center.”
Currently, there are nine residents of the park. All of them will get access to ten government initiatives introduced to “boost the development” of the digital yuan ecosystem. The initiatives include payment solutions, smart contracts, hard wallets, and digital yuan promotion.
Among the residents are Hengbao, Wuhan Tianyu Information, and Lakala Payment. Hengbao and Wuhan Tianyu Information are engaged in the manufacture and sale of various card products, while Lakala Payment is a third-party payment company in China that provides personal payment, merchant payment, credit reporting, etc. by means of hardware and software.
Zeng Zhaoxiang, the executive deputy director of Wuhan Tianyu Information, commented:
“We hope to achieve synergistic effects in the industrial chain and jointly promote the development of the park.”
According to those familiar with the matter, residents of the industrial park will be entitled to free rent. Besides, as part of financial incentives offered for commercial banks and startups, commercial banks will be entitled to up to 20 million yuan ($2.7 million) for setting up there, while startups can secure up to 50 million yuan ($6.9 million). The total governmental financial backing amounts to as much as 100 million yuan ($13.7 million).
China’s Progress In Digital Yuan Development
China has made significant progress in developing its digital yuan, or e-CNY, initiated by the People’s Bank of China (PBOC) back in 2014. In 2019, the government started piloting e-CNY across multiple cities, including Shanghai, Shenzhen and Xi’an. By now, the digital yuan has expanded its use to 26 cities across 17 provinces.
In January 2022, the PBOC published a report stating that 261 million people had set up a digital yuan wallet. In 2023, this number has rapidly grown. The city of Shenzhen alone disclosed that nearly 36 million digital yuan wallets have been opened by its residents, with over seven million new wallets created since the start of 2023 so far. As of the end of June, transactions using e-CNY hit 1.8 trillion yuan ($249.33 billion). As such, the e-CNY is the largest CBDC pilot in the world by both the amount of currency in circulation and the number of users.
Chinese authorities are enhancing the use of e-CNY in an increasing number of cities, and use cases of the digital yuan are also expanding. In May 2023, Changshu in the province of Jiangsu started to roll out salary payments in e-CNY.
In July, the Bank of China, China Telecom, and China Unicom announced the joint launch of SIM card-based e-CNY wallets, which allow offline payments using the SIM’s NFC function.
Besides, China’s Civil Aviation Administration (CAAC) has officially approved the digital yuan for purchasing air tickets. Recently, China’s digital yuan app got a “recharge first and use later” feature that allows tourists to top up their wallets using Mastercard and Visa payments.