China’s Belt & Road Initiative partners will get a cushy trade hub with lots of chances to use its CBDC under a Party development plan.
A modernization plan for the Pudong New Area of Shanghai includes numerous pilot projects for the digital yuan — China’s pilot central bank digital currency (CBDC) — along with extensive new international trade facilities. A document published by the state-run Xinhua News Agency outlines the ambitious five-year plan issued by the Chinese Communist Party Central Committee and General Office of the State Council.
Under the plan, the Pudong New Area will be granted new authorities to develop into an international hub. It will have a commercial mediation system in line with international standards and “convenient” customs procedures. Improved supply chain management will facilitate the freer flow of commodities through newly built port facilities and nearby free trade zones and Shanghai Pudong International Airport.
New educational institutions will have special intellectual property rights for research and development. The plan says world-class medical and educational facilities will attract foreign talent from countries partnering on China’s Belt & Road Initiative under a special visa regime.
These innovations will reportedly provide a vibrant background for new applications of the digital yuan (a.k.a. digital renminbi). The plan includes the following imperatives:
“Pilot the use of digital renminbi in trade settlement, e-commerce payment, carbon trading, green power trading and other fields, and standardize and expand the application scenarios of digital renminbi in the use of fiscal funds.”
By 2027, the document promised, “breakthrough progress will be made in institutional innovation, [and] significant results will be achieved in the construction of a high-standard market system and a new high-level open economic system.”
China is rapidly developing use cases for the digital yuan. It has created integrations with several foreign banks. It has used the digital yuan for gold and petroleum deals on Shanghai exchanges, for example.
This is what I like to call a Friday night flashback. This remote control Triceratops is located in Chuansha New Town, Pudong, Shanghai, China, that is part of the Shanghai Disney Resort. pic.twitter.com/KdnfiNWmge
— Firecaptain and Jack (@Firecaptain16) January 13, 2024
Meanwhile, the Chinese government has cracked down on crypto again this year and issued warnings against the use of the Tether (USDT) and other stablecoins. Crypto mining has also been banned in China. Some of the measures taken against crypto miners have been quite harsh.
United States politicians have reacted strongly against the Chinese CBDC. The latest effort in the U.S. Congress to counter the digital yuan’s progress came in November, when Senator Rick Scott introduced the Chinese CBDC Prohibition Act.