China’s central bank expands fintech regulation to 6 more cities

Getting your Trinity Audio player ready...

The People’s Bank of China is expanding its financial technology regulations to six new cities. In its announcement, the regulator stated that it will allow technology companies in these cities to explore the use of modern technology to financially empower the people and enterprises.

The fintech regulatory project kicked off in December 2019 in Beijing. The PBoC stated at the time that it aimed at speeding up the drafting of fintech regulations, and with Beijing being the capital, it was the perfect place to start. Now, the regulator is expanding the regulatory project to six more cities. These are Chongqing, Shanghai, Shenzhen, Hangzhou, Xiong’an New Area in Hebei and Suzhou.

The regulatory project will allow finance and technology companies in these cities to “apply for innovation tests, and explore the use of modern information technology to financially benefit people and enterprises under the premise of legal compliance and protection of consumer rights.” This will ease the financing difficulties that small and micro enterprises face.

The regulator further hopes that in expanding to these cities, it can help the people overcome the challenges that have come about as a result of the COVID-19 pandemic, enabling them to resume their daily activities “and focus on improving the level of financial services in the real economy.”

The PBoC released its ‘Fintech Development Plan (2019-2021)’ eight months ago, outlining the key targets for fintech in the upcoming three years. In it, the bank revealed that some of the main missions will be strengthening fintech strategic deployments, standardizing the selection of some key shared technologies and strengthening financial risk prevention capability.

China is making strides when it comes to financial innovation, with its biggest project yet being the digital yuan. The currency is edging closer, with sources in the PBoC revealing that it will be in use by the 2022 Winter Olympics in Beijing.

Just days ago, reports emerged indicating that the PBoC will rely on some American companies in the deployment of the digital currency in the Xiong’an district. They include Starbucks, Subway and McDonald’s, which will join 19 other retailers in the district to distribute the currency in a pilot project.