On October 11, China announced the establishment of a dedicated industrial zone in Shenzhen to develop the central bank’s digital currency (CBDC) called e-CNY.
Currently, this special zone has been opened and is undergoing trials with nine residents, including Lakala (a payment processing firm and Visa partner), Wuhan Tianyu Information Technology, and Hengbao (a commercial company).
“We hope to achieve comprehensive efficiency in the industrial chain and promote the development of the digital renminbi ecosystem together.”
- Zeng Zhaoxiang, Deputy CEO of Wuhan Tianyu Information Technology
According to reports, the city government has released ten “initiatives to promote development” of the digital renminbi ecosystem, focusing on payment solutions, smart contracts, hardware wallets, and promotions.
Incentives for residents include up to three years of free rent. Commercial banks can receive up to 20 million renminbi (approximately $2.7 million) when settling there, while startups may receive up to 50 million renminbi (approximately $6.9 million). The government’s total support reaches 100 million renminbi (about $13.7 million). Additionally, subsidized loans with favorable interest rates are being provided.
Since the launch of the CBDC, China has implemented various measures to encourage the use of the digital renminbi. Currently, it is in the trial phase in 26 cities and is accepted by 5.6 million merchants. This number is likely to steadily increase due to government incentives and technological advancements.
Recently, the digital renminbi app added options for tourists to use Visa and Mastercard. However, the adoption of the digital renminbi wallet has been relatively slow, with only 261 million wallets created as of 2022.