China launches first digital currency industrial park
China has launched its first industrial park dedicated to developing and applying the digital yuan, or e-CNY, in the city of Nanjing, Jiangsu province.
The park, which covers an area of 10 square kilometers, aims to attract more than 100 enterprises and institutions related to the digital currency ecosystem, such as financial technology, blockchain, big data, artificial intelligence, and cloud computing.
The park was officially opened Oct. 12 by signing a strategic cooperation agreement between the Nanjing municipal government, the People’s Bank of China (PBOC), the central bank’s Nanjing branch and the Nanjing Economic and Technological Development Zone. The agreement outlines the park’s vision, goals and plans, which will serve as a platform for innovation, experimentation and promotion of the e-CNY.
The park will also host several pilot projects and scenarios for the e-CNY, such as cross-border payments, digital identity verification, smart contracts and digital asset management. The park will also support the integration of the e-CNY with other digital currencies and platforms, such as the digital renminbi internationalization platform (DRIP), which the PBOC launched in July to facilitate cross-border trade and investment using the e-CNY.
The project’s launch is part of China’s efforts to accelerate the research and development of its sovereign digital currency, which was initiated by the PBOC in 2014. The e-CNY is designed to be a legal tender that can be used for retail payments and a tool for monetary policy implementation and financial stability. The e-CNY is not a cryptocurrency but a digital representation of the physical yuan that the central bank backs.
China has been conducting trials of the e-CNY in various cities and regions since 2020, involving millions of users and thousands of merchants. The tests have put to work multiple functions and features of the e-CNY, such as offline payments, dual offline wallets, intelligent tips and controllable anonymity. The trials have also involved some international partners, such as the Hong Kong Monetary Authority and the Bank for International Settlements.
According to Deputy Governor of the PBOC Fan Yifei, China has made significant progress in developing the e-CNY and will continue to explore more use cases and scenarios for its application. Yifei also said that China will adhere to the principles of openness, cooperation, and coordination in advancing the e-CNY project and actively participate in international discussions and collaboration on digital currency issues.
