Shenzhen’s Local Government Says Digital Yuan Testing is Making Positive Progress
After news about new digital yuan pilot projects was reported earlier this week, another major update on the current state of China’s digital national currency was revealed. This time, the update came from Shenzhen, where the local government issued an official comment on the current state and progress of digital yuan projects in the region.
On Aug. 19, the Shenzhen Municipal Financial Supervision and Administration Bureau made the work dynamics of their project public. According to the official government website, projects involving digital currencies have so far made “positive progress.” The projects that have shown the best results were focused on innovation in financial technologies such as applying digital currencies to mobile payments.
This is the first time the government of Shenzhen has commented on the progress of their digital currency pilot projects. The region is one of the four “pilot cities” selected by China’s national bank, the People’s Bank of China, to carry out internal testing of digital currencies.
All pilot projects focused on digital currencies in Shenzhen are done under the “Shenzhen Implementation Action Plan. Introduced earlier in July by the Shenzhen United Central Bank Shenzhen Central Branch, the Shenzhen Banking and Insurance Regulatory Bureau, and the Shenzhen Securities Regulatory Bureau, the plan proposes a coordinated approach to developing China’s digital yuan in a series of pilot projects and measures.
Chen Wen, director of the Digital Economy Research Center of the School of Finance of Southwestern University of Finance and Economics, told local reporters that Shenzhen might decide to take product application farther than other pilot cities. This statement is in line with the government’s proactive stance towards development—digital currencies, whether issued by private companies or central banks, require extensive development and testing. Any help from the government is set to significantly speed up the process.
However, when it comes to Shenzhen, it might not be the government that takes the digital yuan across the finish line. Wen told iNews reporters that Shenzhen has an unusually large concentration of excellent tech companies, with a large number of them being involved with blockchain technology. These companies will most likely play a very important role in developing technical standards for digital currency applications, Wen explained, adding that they could also provide the government with concrete solutions to some of the problems the digital yuan faces.
Shenzhen is also part of the so-called “4+1” regions, which include Chengdu, Suzhou, the Xiongan New District, and Winter Olympics locations. The country’s Ministry of Commerce issued a notice regarding several ongoing pilot projects for digital yuan applications last week, announcing measures that will expand the use of the digital yuan. The document, titled “The Notice on Printing and Distributing the Plan for Deepening the Pilot Program for Innovation and Development of Trade in Services,” stated that conditions were fulfilled for the digital yuan to be tested in the above-mentioned regions.
According to a report from the 21st Century Business Herald, the current pilot projects focusing on the digital yuan have all completed the top-level design. The projects have all passed standard formulation practices, with the better part of functional research and development now completed.