China’s Shandong Province has introduced a digital yuan loan program for entrepreneurs, a step towards integrating digital currency in regional business practices.
According to Beijing Business Today, Shandong’s capital city Jinan recently facilitated a digital yuan entrepreneurial guarantee loan in the province and launched the online system “Ji Dan – Entrepreneurial Loan” to streamline access to capital for small businesses.
Shandong Pioneered in Digital Yuan Loans
The loan, capped at 200,000 yuan (~$28,000), was the first to benefit startup companies in Shandong. Previously, China Construction Bank’s Shanghai branch partnered with the Shanghai Data Exchange and issued the first data asset pledge loan.
As China proceeded with implementing central bank digital currency (CBDC) applications, digital yuan has demonstrated its advantages regarding business operation and lending services. The transactions would process especially fast and showcase the unique feature of traceability.
National Committee Members Advocate for CBDC
During the ongoing 2024 National People’s Congress and the Chinese Political Consultative Conference, the digital currency was a hot topic among delegates and members, leading to various suggestions for its further application and integration into China’s economy.
Delegates proposed the phased implementation of the CBDC, emphasizing its legal tender status and voluntary use. Clarification of the relationship between digital yuan, cash, and bank deposits was suggested to ensure a smooth exchange mechanism.
For instance, Yuan Xiaobin, a member of the National Committee of the Chinese People’s Political Consultative Conference and chairman of the management committee of Zhonghao Law Firm, emphasized the importance of delineating the relationships among digital yuan, cash, and bank deposits and ensuring a seamless conversion process.
Further, the conference saw recommendations for expanding the e-CNY‘s application in international trade and cross-border capital flows.
Zhou Chunling, the chairman of Heilongjiang Yong’an Group, pointed out the potential role of the digital yuan as a significant currency for international transactions and reserves.
Zhou suggested allowing digital yuan accounts to interconnect with foreign banks for easy conversions and usage through mobile and computer applications, aiming to encourage the adoption of the yuan in international dealings.