On October 11, China inaugurated an industrial park in the Luohu district of Shenzhen, neighboring Hong Kong, focused on evolving the digital yuan ecosystem, according to reports from Chinese media. This establishment marks the first park explicitly dedicated to the development of the central bank digital currency (CBDC), also known as e-CNY.
Upon its opening, the park welcomed nine residents and, as per reports, the district government has disclosed ten “initiatives to spur development” pertaining to the digital yuan ecosystem. These initiatives encompass aspects like payment solutions, smart contracts, hardware wallets, and promotional activities for the digital yuan.
Various incentives have been extended to the park’s residents, including up to three years of complimentary rent. Commercial banks can receive up to 20 million yuan ($2.7 million) for establishing their presence there, while startups may qualify for up to 50 million yuan ($6.9 million). The total governmental support is capped at 100 million yuan ($13.7 million), and loans with favorable terms are also available. Among the inaugural residents of the park are Hengbao, Wuhan Tianyu Information, and Lakala Payment – with Hengbao and Tianyu being producers of payment cards, while Lakala operates as a payment processor and is a partner with Visa. Zeng Zhaoxiang, the executive deputy director of Wuhan Tianyu Information, expressed to China Daily:
“We aspire to realize synergistic impacts across the industrial chain and collectively foster the park’s development.”
In its official pilot stage, China has implemented numerous strategies to amplify the utilization of the digital yuan. Currently, twenty-six cities are involved in the pilot, and the CBDC is accepted by 5.6 million merchants — a figure poised for gradual expansion, given the government’s endorsement and advancements in technology.
Recently, an option was introduced in the digital yuan app, allowing tourists to utilize Visa and Mastercard to fund their wallets. However, despite the creation of 261 million digital yuan wallets as of 2022, the adoption rate is perceived to be languid.
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