Shenzhen Set for More Digital Renminbi, Renminbi Internationalisation Trials as Part of Municipal Reform Program

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China’s State Council has just unveiled an ambitious new reform program for the southern tech hub of Shenzhen that outlines major fintech and financial sector initiatives.

On 11 October the State Council released the “Shenzhen Comprehensive Reform Trial Implementation Plan for the Development of an Advanced Demonstration Zone for Socialism with Chinese Characteristics (2020 – 2025)” (深圳建设中国特色社会主义先行示范区综合改革试点实施方案(2020-2025年)), alongside related notices to local authorities calling for implementation.

The Implementation Plan outlines a number of key fintech initiatives, including the establishment of a fintech innovation platform in Shenzhen by the Chinese central bank’s Digital Currency Research Institute on the basis of its existing offices.

The Plan calls for undertaking further closed trials of the digital renminbi in Shenzhen, and driving R&D applications and international cooperation in relation to the digital renminbi.

The release of the Implementation Plan coincided with the holding of a lottery in the Shenzhen district of Luohu, for the distribution of 10 million yuan in CBDC to 50,000 local residents via a blockchain-driven system and a unique Digital Renminbi app. The lottery drew the participation of more than 1.91 million participants in the Shenzhen municipal area.

In April the Chinese central bank announced that it had commenced testing of the central bank digital currency (CBDC) in four cities around China, including Shenzhen, Suzhou, Chengdu and Xiong’an.

The Implementation Plan also calls for further opening of the local financial sector, including support for advanced renminbi internationalisation trials, refinement of the foreign exchange regulatory system, support for Shenzhen enterprises pursuing offshore financing via IPO’s, and cross-border fund pool trials involving both domestic and foreign currencies.

Shenzhen will allow qualified foreign invested financial institutions to establish securities companies and fund management companies within its jurisdiction.

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