Under the guidance of government of  Shenzhen, China’s first Alliance of Fintech Digital Currency and China Fintech Research institute has been initiated this month. The founding members include the first- tier financial companies like Pingan Group, China’s Merchants Bank，Dacheng Fund. The incident matters as it’s the first time for a local government to lead such initiatives with strategic vision to promote financial innovation and speed up RMB’s global acceptance. The community has interpreted the move as a strong indicator for Shenzhen to become the first city to have a test run for digital currency of People’s Bank of China(PBOC).

There are 2 reasons for the interpretation.

First. Shenzhen, the pioneer city for China’s modern opening up since 1978,  is now among the most open and dynamic financial city in China. Till November 2016, the total financial assets of Shenzhen amount to RMB 12.6 trillion, ranking the third nationally. The representatives of the leading innovation companies include Huawei, zhongxing, Tencent, Pingan Group and China’s Merchant Bank.

He Xiaojun, the head of Financial Office of Shenzhen government said:

“Shenzhen can be seen as the best test ground for central government to implement financial reform and innovation and to explore the national digital currency strategy. Shenzhen is the closest city to Silicon Valley or Israel as a global financial innovation center.”

Second is the local government’s full support. Mr He noted that Shenzhen will reward financial innovation projects especially those of digital currency, Blockchain and financial big data. Shenzhen will try to bring strategic digital currency platform into Shenzhen: with the efforts of Financial Office of Shenzhen, Shenzhen will locate the operating body of digital currency of PBOC into Shenzhen. Lastly, Shenzhen will focus on the development of digital currency by encouraging universities to put digital currency and Blockchain technology on the curriculum as a way to cultivate talents.

8btc news has extensive report on China’s initiative on digital currency. For more information, please see:

PBOC aims to develop digital currency

Three Concerns behind efforts of China’s Central Bank in Digital currency