Just over a week after China’s announcement of a government-backed cryptocurrency being ready for deployment, we got more news from the gold-red country regarding digital currencies.
This time from what is considered to be China’s Silicon Valley, also known as the extraordinary smart-city of Shenzhen, located in South-Eastern China.
According to the Chinese Communist Party (CCP), a new mandate for the local digital currency was proposed in a new set of guidelines addressing Shenzhen’s Special Economic Zone.
China’s Silicon Valley will start with a pilot as soon as this autumn, aiming to boost international market access, increase transparency in regulatory system mechanisms, as well as incubate new industries such as smart machine-to-machine economies, health information technologies (HIT), and overall promote growth and innovation in the economy-focused area of the city.
In addition, the guideline cites that the Special Economic Zone will have the ability to create necessary conditions to promote the governmental registry system, upscale the reach-out of local financial services, and improve research in the financial sector.
What is Shenzhen and why should we care?
In case you’re unfamiliar with the world capital of hardware, Shenzhen, a city that was nothing more than rice fields a couple of decades ago, became China’s first “Special Economic Zone” back in the ’80s.
Being part of the Special Economic Zone in China allows local companies to operate without the strict rules and regulations that come with other regions of the communist country.
Members are eligible to attract foreign investments into China through flexible taxation systems, international exchange markets and other benefits that come with the Special Economic Zone’s “club-card”.
Shenzhen, while a rival and border city to the Queensland member Hong Kong, has strong ties with all members of the Chinese Special Economic Zone, making the “Silicon Valley” title subtract from Shenzhen’s true nature.
Just Google the city and watch a sci-fi movie of tomorrow in real-life. Shenzhen was the first country to go fully digital with AliPay, WeChat, and Tencent wallets. It is also the first city to introduce the social rating system, that actually works flawlessly, and paradoxically, the residents love it.
Therefore, it shouldn’t be a big surprise, that a city of its scale is adopting cryptocurrency, even if it’s on a centralized local-oriented manner.
While neighboring Hong Kong is still under a series of ongoing pro-democracy rallies and intense protests, citizens are rushing to crypto looking for a safe-haven, as things seem uncertain in the Southern Chinese maritime capital.
Furthermore, the government’s recent revelation of its own digital currency, which is supposed to be just around the corner, sparked more enthusiasm towards cryptocurrencies; especially when digital assets were considered “banned” in the country prior to the recent announcements.
Circle CEO, Jeremy Allaire, said in a recent post that it was clear that the country has been on the path to soften its stance on crypto, and he is more than just right, looking at this 180-degree shift towards cryptocurrencies in China.
Finally, just a tip, Shenzhen is the birthplace of Huawei, Xiaomi, DJI, Tencent, and so many more triple-A Chinese brands you probably already have in-house.