China opened an industrial park dedicated to developing the digital yuan ecosystem on Oct. 11, according to Chinese press reports. This is the first such park dedicated to the central bank digital currency (CBDC), which is also referred to as the e-CNY.
The industrial park is located in the Luohu district of Shenzhen adjacent to Hong Kong. It is opening with nine residents. According to reports, the district government has announced ten “initiatives to boost the development” of the digital yuan ecosystem that involve payment solutions, smart contracts, hard wallets and digital yuan promotion.
Incentives are being offered to residents that include up to three years’ free rent. Commercial banks can receive up to 20 million yuan ($2.7 million) for settling there, startups are eligible for up to 50 million yuan ($6.9 million). Total government support is set at 100 million yuan ($13.7 million). Loans at advantageous rates are also being offered.
Among the first residents of the park were Hengbao, Wuhan Tianyu Information and Lakala Payment. Hengbao and Tianyu produce payment cards, among other things. Lakala is a payments processor and Visa partner.
The Shenzhen Digital RMB Industrial Park officially launched operations on Wednesday, according to a press briefing held in the southern Chinese metropolis of Shenzhen https://t.co/Pi3Z6bjUvp pic.twitter.com/SehYDnhoUu
— China Xinhua News (@XHNews) October 12, 2023
Wuhan Tianyu Information executive deputy director Zeng Zhaoxiang told China Daily:
“We hope to achieve synergistic effects in the industrial chain and jointly promote the development of the park.”
China has taken many measures to promote the usage of the digital yuan, which is officially in the pilot stage. Twenty-six cities are participating in the pilot, and the CBDC is accepted by 5.6 million merchants – a number that is likely to grow steadily thanks to government encouragement and technological development.
The digital yuan app recently added an option for tourists to use Visa and Mastercard to add to their wallets. Nonetheless, with 261 million digital yuan wallets created as of 2022, adoption is considered sluggish.