China’s New Cryptocurrency to be Tested in Shenzhen

China’s New Cryptocurrency to be Tested in Shenzhen

by August 26, 2019

China’s State Council and the Central Committee of the Communist Party of China have released a detailed plan for wide-ranging reforms to be implemented in Shenzhen.

The new guideline, released last week, outlines Beijing’s plan to turn Shenzhen into “one of the leading cities in the world in terms of economic strength and quality of development” by 2025, with a key focus put on research and development, industrial innovation, quality public services, and environmental protection, reports Chinese news agency Xinhua.

By 2035, Shenzhen should become “a national model of high-quality development, as well as a hub of innovation, entrepreneurship and creativity with international influence.” The long-term ambition is for the city to be “one of the top cosmopolis in the world and a global pacesetter with outstanding competitiveness, innovative capacity and influence.”

Efforts will be made to promote the development of emerging industries with strategic importance, such as the “intelligent economy” and healthcare, as well as support research on its new digital currency and the application of innovations like mobile payment.

Shenzhen’s tech hub has been flagged by the Chinese government for trials of its digital currency. Sources say that once the research is completed, efforts will be made to promote the digital currency broadly.

This follows story follows the news of China’s plan to launch its own cryptocurrency. They have been reportedly studying the feasibility of their own cryptocurrency for the past 5 years but have sped it up in response to Facebook’s Libra.

Interestingly, officials from China’s central bank was quoted saying that the new cryptocurrency will not rely solely on blockchain technology.

Shenzhen is a major city in south China’s Guangdong province and the country’s first special economic zone, has transformed, over the past 40 years, from being a sleepy fishing village to becoming a major economic hub focusing on high-tech, financial, and logistics.

Today, Shenzhen has a population of about 13 million and is the headquarters of Chinese tech giants like Huawei and Tencent. In 2018, the city recorded a gross domestic product of 2.42 trillion yuan (US$346 billion), up 7.6% year-on-year, surpassing Hong Kong’s for the first time.

The new guideline is part of China’s broader Guangdong-Hong Kong-Macau Greater Bay Area (Greater Bay Area) strategy, the main goal of the Greater Bay Area is to combine Hong Kong, Macau and the cities of Guangdong’s Pearl River Delta to create a new powerhouse with the economic heft that is comparable to the San Francisco Bay Area, Greater New York and the Greater Tokyo Area.

Areas of focus include boosting infrastructure connectivity, cooperating and participating in China’s Belt and Road Initiative, focusing on innovation and technology, and building a modern industrial system.

The introduction of new economic plans comes at a time when political tensions between the mainland and Hong Kong are escalating, threatening the city’s status of the Asian financial hub.