A Chinese town has agreed to become a digital yuan “demonstration town” after striking a CBDC deal with a major, state-run bank.
Per JSChina, the deal was struck in Likou, a town in Siyang County, near the city of Suqian in China’s Jiangsu Province.
The People’s Government of Likou Town reportedly signed a deal with the Likou Branch of the Postal Savings Bank of China.
The parties will now “build a digital RMB demonstration town.”
The bank has been one of the biggest advocates of the digital yuan, and has focused much of its efforts on developing “offline” and “hard wallet” solutions that do not make use of internet-connected smart mobile devices.
The central People’s Bank of China has repeatedly said that it views the e-CNY as a solution for the unbanked.
In 2021, a Merchant Machine study, reported by Global Finance, found that 20% of Chinese are classified as unbanked, with internet penetration standing at just 54%.
By contrast, in nearby South Korea, just 5% of residents were classified as unbanked, with internet penetration at 95%.
The Postal Savings Bank began piloting internet-free digital yuan smartcards in 2021.
It has since moved on to producing wearable hard wallets.
The Likou deal will see the town develop and adopt a range of “green” and “smart city” technology.
It will also “promote the application and popularization of digital yuan” as part of the “digital economy.”
The town did not reveal exactly how it hopes to achieve its goals.
But it pledged to create a “specialized digital yuan community” that will serve as a model for other towns that want to further adopt the coin.
It claimed it would use the CBDC to “provide efficient, convenient, and safe services for the general public,” as well as local enterprises.
China Pursues Greater Digital Yuan Adoption
Elsewhere in Jiangsu Province, a farmer’s market in Wuxi this week held a promotional event for digital yuan-paying customers, Wuxi New Media reported.
Many stallholders at the market offered discounts and bonuses for CBDC-paying customers.
Farmers’ markets across the pilot zone began accepting CBDC payments late last year.
A Weibo post from the government of Xihu District showing a shopper at a farmers’ market paying with the digital yuan last year. (Source: Weibo/Xihu Duistrict Government/Screenshot)
The central bank wants to spur digital yuan micropayments adoption, and has been promoting the use of the coin in the transport and retail sectors.