Published: 11:43, October 12, 2023 | Updated: 11:47, October 12, 2023
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China's 1st e-CNY park opens for biz
By ​Wang Xu in Shenzhen, Guangdong

Favorable policies in place to boost digital RMB in Shenzhen's Luohu

A staff member of the Bank of Communications Beijing Branch instructs a visitor to open a digital RMB wallet on a mobile phone on June 16, 2021. (PHOTO / XINHUA)

As a key step in promoting the nation's digital currency, or e-CNY, Shenzhen, Guangdong province, launched on Wednesday China's first digital renminbi industrial park in the city's Luohu district, with the first batch of nine financial companies, including Lakala Payment, settling in.

Along with the launch of the park, the district government unveiled an outline with 10 initiatives to boost the development of the local digital RMB ecosystem.

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

Huang Tuo, head of the Luohu financial services department

According to the outline, the government will arrange a total of 100 million yuan ($13.7 million) as special support funds over the next three years to develop the digital RMB ecosystem in Luohu, focusing on computing, algorithms and data concerning the digital economy.

The initiatives also aim to facilitate payment solutions across various industries, promote the use of smart contracts based on blockchain technologies, integrate hardware wallets with smart devices, and encourage the operation and promotion of e-CNY, among other objectives.

"The establishment of China's first such park marks a significant milestone in the nation's digital currency development process," said Huang Tuo, head of the Luohu financial services department.

By attracting digital RMB industrial chain enterprises, financial technology entities and major platform players, Luohu aims to establish a new development pattern for the digital economy industrial cluster in the next three years and help boost the high-quality development of Shenzhen's digital economy, Huang said.

The Luohu park will also attract commercial bank arms in e-CNY and players specialized in the sector to establish an e-CNY industrial cluster, offering a settlement incentive of up to 20 million yuan each.

Startups engaging in e-CNY business can also receive a settlement incentive of up to 50 million yuan based on their investments. Incentives are arranged to support the development of digital RMB industrial chain enterprises, providing incentives of up to 500,000 yuan each based on revenue performance.

Enterprises entering the industrial park will enjoy free rent for up to three years. They can also apply for loans with favorable interest rates and establish digital RMB experience centers.

Zeng Zhaoxiang, executive deputy director of Tianyu Information Ltd, which will settle in the industrial park, told China Daily that what attracted his company was the leading position of Luohu and Shenzhen in digital currency.

Zeng said: "Luohu is the first district to pilot the application of digital RMB. It has many advantages in terms of digital RMB operating scenarios and has a leading position in the reserve of relevant talent nationwide.

"We look forward to the rapid aggregation and formation of the digital RMB ecosystem within the industrial park and we hope to achieve synergistic effects in the industrial chain and jointly promote the development of the park."

China's digital currency was introduced as a pilot project in 2019. In recent years, its adoption has gained significant momentum, with 26 cities participating in the pilot program. As of last year, 5.6 million registered merchants accepted e-CNY nationwide.

In 2023, the implementation of e-CNY entered a rapid expansion phase as Yi Gang, former governor of the People's Bank of China, said that by the end of June, the total number of transactions had reached 950 million, with a cumulative value of 1.8 trillion yuan.

Meanwhile, a wide range of applications are currently being tested or have already been implemented, such as integrating e-CNY with international credit cards and enabling payments in situations where electricity is not available.