China Launches First Digital Yuan Ecosystem Industrial Park in Shenzhen

In a significant move, China inaugurated its inaugural industrial park exclusively dedicated to nurturing the digital yuan ecosystem, often referred to as the e-CNY, in Shenzhen's Luohu district, located near Hong Kong. The industrial park has initially welcomed nine resident companies, while the district government has unveiled a series of ten strategic initiatives aimed at promoting the digital yuan ecosystem, encompassing payment solutions, smart contracts, hardware wallets, and digital yuan adoption.

To incentivize resident companies, the government offers benefits, including up to three years of rent-free facilities. Commercial banks settling within the park can receive a substantial amount of up to 20 million yuan ($2.7 million), while startups are eligible for up to 50 million yuan ($6.9 million) in support. The total government support package is capped at 100 million yuan ($13.7 million), complemented by advantageous loan rates. Among the initial residents are Hengbao, Wuhan Tianyu Information, and Lakala Payment, with a focus on payment cards, processing, and financial services.

China has proactively implemented various measures to promote the use of the digital yuan, currently in the pilot phase across 26 participating cities, with acceptance by 5.6 million merchants. The digital yuan app has also introduced features that enable tourists to add Visa and Mastercard to their wallets. However, despite the creation of 261 million digital yuan wallets by 2022, the adoption rate is perceived as gradual.