Digital yuan trials included in 5-year modernization plan for Shanghai district

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Authorities in China have confirmed a modernization plan for Shanghai’s Pudong New Area, focusing on establishing a new commercial hub and digital yuan experiments.

The plan, reported by state news outlet Xinhua News Agency, is a work by the Chinese Communist Party Central Committee and the General Office of the State Council. Broadly divided into seven major objectives, the blueprint envisions the creation of tailor-made rules to support common standards for improved market access.

Improving cross-border business transactions in the Pudong New Area is a priority for Chinese officials. To achieve the objectives, the blueprint advocates for an efficient customs clearance mechanism and improvement of the cargo hub functionality of the Shanghai Pudong International Airport.

There are plans in motion to develop a digital trade service platform and a blockchain-based digital identity certification platform.

The next phase of the plan will involve deepening the region’s talent pool across Web3 and other emerging technologies. Rather than solely focusing on developing homegrown talent, Chinese authorities are open to attracting foreign experts by offering permanent residency, research grants, and seamless work permits.

On the local side, there are extensive plans to provide a steady stream of experts to power Pudong New Area’s new commercialization ambitions.

“Establish a ‘teaching and mentoring’ mechanism for top scientists to cultivate high-level compound talents with the potential of strategic scientists,” said the report. “Explore the cooperation between high-quality high schools and domestic first-class universities to build a joint training model for top innovative talents in mathematics and science.”

Officials say they will throw their weight behind new central bank digital currency (CBDC) experiments to explore myriad utilities in the region. In the future, the digital yuan will be used for e-commerce payment, green power trading, carbon trading, and trade settlement, with applications in cross-border trade expected to be explored.

Chinese CBDC canters on

China’s digital yuan pilot has advanced to encompass applications in retail, transport, hospitality, and securities industries. Adopting a cautious approach, the People’s Bank of China (PBoC) has expanded the phased pilot to new provinces in mainland China, eyeing an expansion in nearby Hong Kong.

Despite the steady progress, there are fears that CBDC adoption in China has plateaued, forcing the central bank to explore new functionalities. The PBoC is testing the waters with offline payment functionalities, a red envelope feature, and NFC capabilities to compete with other payment alternatives.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

Watch: BSV Blockchain in China