Chinese authorities have put forth proposals aimed at expediting the adoption of the digital yuan in specified districts within Beijing and Shanghai.
The China State Council’s General Office has disclosed a comprehensive reform plan designed for Shanghai’s Pudong New Area, set to be implemented between 2023 and 2027.
The primary objective of this plan is to bolster reforms in the area, ultimately positioning the Pudong District as a trailblazer in modernization.
The reform strategy includes a significant emphasis on piloting the use of the digital yuan across various sectors in Pudong. This underscores the potential of the digital yuan in modern financial and economic systems.
A key component of the reform is the incorporation of the digital yuan into trade settlement, e-commerce payments, carbon trading, and green power trading. This strategic move is anticipated to standardize and broaden the application scenarios of the digital yuan, particularly in the utilization of fiscal funds.
Alongside these applications, the plan also concentrates on supporting headquarters institutions in the development of offshore trade and economic activities through the facilitation of the digital yuan.
Simultaneously, Fung Kwok-yau, a Beijing Municipal Committee Member and President of the Hong Kong Professionals Association, has advocated for the swift progress of Beijing’s “Digital Yuan Adoption Demonstration Zone” to raise awareness of the digital yuan.
In an interview with Ta Kung Pao, Fung proposed expanding the digital yuan’s application by installing e-CNY terminals in local stores at popular sightseeing attractions, malls, and shopping districts.
Fung highlighted several challenges faced by the promotion of digital yuan, including a late entry into the contactless payment market, high user acceptance barriers, difficulty in sustaining subsidies, and the challenge of reshaping user habits.
He suggested that cultural and tourism departments take the lead in popularizing the concept of central bank digital currency (CBDC) and educating people on how to use the digital yuan.
To promote digital yuan applications citywide, Fung recommended establishing a regular promotion mechanism and implementing measures to encourage consumers, such as providing incentives for small and medium-sized merchants already using digital yuan terminals to assist consumers in understanding and using the currency.