China has inaugurated its first industrial park committed to the growth of its central bank digital currency (CBDC), also known as the digital yuan or e-CNY.
Situated in Shenzhen's Luohu district, adjacent to Hong Kong, the park aims to bolster the digital currency's ecosystem through a series of initiatives involving payment solutions, smart contracts and hard wallets.
On October 11, the Luohu district government revealed plans that include up to three years of free rent for residents and financial incentives for commercial banks and startups to set up in the area.
Specifically, commercial banks could be entitled to up to 20 million yuan (US$2.7 million) for locating there, while startups could secure up to 50 million yuan (US$6.9 million).
First residents
Among the inaugural residents of the industrial park are payment card producers Hengbao and Wuhan Tianyu Information, as well as payments processor Lakala Payment.
Zeng Zhaoxiang, the executive deputy director of Wuhan Tianyu Information, told China Daily, “We hope to achieve synergistic effects in the industrial chain and jointly promote the development of the park."
Despite being in its pilot stage and accepted by 5.6 million merchants across 26 cities, the digital yuan has seen considered slow adoption, with 261 million digital wallets created as of 2022.
Nonetheless, the government's persistent encouragement and technological developments are poised to stimulate growth in usage.