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Shanghai Pilots Offshore Use of Digital Yuan on Conflux Blockchain

The city of Shanghai opened a blockchain research lab out of the Shanghai Maritime University for enhanced fintech innovation. 

Shanghai Maritime University and local blockchain startup Conflux started the research lab on September 15, 2021. The goal of this center is the further establishment of Shanghai as a center for global finance and shipping. 

This new blockchain lab is the first one in the city. It sits in Lingang in the Pudong New Area, with goals for boosting blockchain applications in that area. In addition, it will boost capability for offshore digital yuan transactions.

At present the Conflux blockchain deals with roughly 3,000 transactions per second. It sends a deal confirmation within 23 seconds of completion. The official press release from the city of Shanghai touts it as more efficient than traditional banks. Moreover it says their network is 428 times faster than other blockchain networks, like the bitcoin network. 

According to Long Fan, the founder of Conflux, the products of the new blockchain center will be widely utilized. He cites future integration with local businesses and the government sector. 

The ultimate goal is for the development of the city’s digital infrastructure. Moreover it will establish a pioneering Chinese blockchain network.

Shanghai innovation, Chinese crackdown

The push for Shanghai as a blockchain innovation hub is not a new one. Back in 2019 the city entered the “blockchain alliance” with financial institutions in the city’s e-port.  More recently over the summer Shanghai became one of many cities across China to airdrop digital yuan. The city airdropped over 19.25 million digital yuan to citizens through a lottery. 

Across China in the last three months around 10 millions users gained eligibility for participation in digital yuan trials. While China pushes the  digital yuan, also called a central bank digital currency (CBDC), the rest of the industry falters. 

The People’s Republic of China began a purge of crypto miners this past year. As miners flee the country, crypto-linked businesses also fear the government’s heavy hand. 

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