Digital currency research in Shenzhen City backed by Chinese Government

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digital currency
Fireworks erupt over Shenzhen, China.

The Chinese Communist Party has included a mandate for digital currency research in a new set of guidelines on the scope of the Shenzhen Special Economic Zone.

Chinese state-owned media outlet, CCTV, published the new guidelines in a report published today (Sunday 18/8).

“We will carry out pilot reforms of market access and regulatory system mechanisms, establish a more flexible and prudent and inclusive regulatory system, actively develop new industries and new formats such as smart economy and healthy industries, and build a pilot zone for digital economic innovation and development,” the new guidelines state.

“Improve the economic ability of financial services entities, research and improve the GEM listing and listing, refinancing and mergers and acquisitions restructuring system, and create conditions to promote the reform of the registration system.

“Support innovative applications such as digital currency research and mobile payment in Shenzhen.

Shenzhen City, which shares a border with Hong Kong, became China’s first ‘Special Economic Zone’ in 1980.

In Chinese Special Economic Zones companies are allowed to operate without much of the red tape and regulation that comes with doing business in other parts of the communist country.

There are also significant tax and other incentives aimed at attracting foreign investment into the economic zones.

The new guidelines have raised eyebrows, coming as neighbouring Hong Kong, a Chinese territory, remains embroiled in its 11th week of pro-democracy rallies.

Support for Bitcoin growing in China

The Communist Party’s digital currency mandate for Shenzhen is another indication of its changing attitude towards cryptocurrency.

Recently Bitcoin has been labelled a safe-haven asset by a Chinese state-owned media outlet, while the People’s Bank of China released a bizarre infographic about the soaring value of Bitcoin.

In the past week, the Chinese Government revealed it has its own digital currency ready to launch after five years of development, however, it now appears unlikely the currency will be blockchain-based.

The shift in attitude towards cryptocurrency has been recognised by a number of cryptocurrency experts, including Circle CEO, Jeremy Allaire.

“We have been seeing, from my vantage point, a softening in the Chinese stance towards crypto,” Allaire told CNBC.