China Concludes Its First Solar Transaction In E-CNY!

State Grid Suzhou Power Supply Company, an electricity supplier based in Suzhou, China, recently unveiled the success of its first transaction in the solar energy sector, using a smart contract in digital yuan (e-CNY).

A promising solution for Chinese SMEs

The city of Suzhou, at the forefront of digital yuan experimentation in China has just achieved a major breakthrough in integrating smart contracts into the energy transition. Its local subsidiary of the State Grid has successfully carried out the very first transaction using a smart contract denominated in e-CNY, specifically in the strategic solar energy sector.

According to the daily Yangtse Evening Post, this technological milestone is the fruit of an innovative partnership between State Grid Suzhou and a materials SME, Suzhou Shicheng. The latter had previously taken out a smart contract loan with a bank.

Once her consumption of green electricity over a defined period had been invoiced by State Grid, the smart contract was automatically closed: Suzhou Shicheng’s digital yuan portfolio was debited for the exact amount of energy consumed.

This automated billing mechanism promises accurate loan repayments and paves the way for the development of tailored financing solutions for the photovoltaic industry thanks to smart contracts.

The CEO of Suzhou Shicheng Material Technology highlights the effectiveness of smart contracts in responding quickly to the pressing needs of small and micro businesses, speeding up the traditional financing cycle.

The traditional financing cycle for small and micro businesses takes time. It also takes time. Smart contract technology has helped us meet our pressing needs. It will help small businesses obtain bank financing more easily and more quickly.

Statement from the CEO of Suzhou Shicheng Material Technology

Towards large-scale adoption of smart contracts in the energy sector?

Building on the success of this first experiment, State Grid Suzhou is already working on the deployment of a smart contract dedicated to financing large-scale solar projects, in partnership with China Merchants Bank.

This ambitious scheme would involve automated sharing of green electricity production and consumption data between producers, energy suppliers and financial institutions. Business customers would have their bills paid in real time by their e-CNY portfolio.

It would be a continuation of Suzhou’s pioneering commitment to hands-on experimentation of the digital yuan particularly in the strategic energy sector.

Optimizing solar financing, reducing risk for banks, accelerating loans to green SMEs… the potential benefits are manifold. Above all, it could provide a lasting boost to the Chinese photovoltaic industry, from producers to subcontractors.

This unprecedented breakthrough could be a turning point, accelerating the large-scale adoption of digital yuan for smart contracts and beyond. Currently being tested in 26 cities and 17 provinces, e-CNY is already showing concrete signs of cross-border use, as illustrated by the first international crude oil transaction carried out in October on the Shanghai Petroleum and Natural Gas Exchange (SHPGX).