Revolutionary Move: Chinese City of Changshu Leads the Way with Digital Yuan Salaries!
The eastern Chinese city of Changshu is set to pay civil servants and public sector workers solely in digital yuan starting in May. This move is part of a larger effort to promote the use of the digital renminbi in Jiangsu Province. Changshu already accepts digital yuan payments for services like water, gas, cable TV, and public transport. However, the adoption of the digital currency has been slow, possibly due to a lack of places to use it.
Unlike cryptocurrency, which Beijing bans on the mainland, the digital currency is backed by China’s central bank. Pilot programs are underway in 17 provinces to increase usage by 2025. The digital yuan is supported by state-owned banks and other financial institutions.
This move marks a significant milestone in the promotion of the digital renminbi, or digital yuan, as it represents the largest-scale implementation of the e-currency to date. However, according to a public servant in Changshu, local merchants do not accept the e-currency, prompting immediate conversion to traditional yuan upon receipt. Evidently, the adoption of the digital currency has been relatively slow. From its inception until August of last year, only around $14.5 billion (¥100 billion) worth of digital yuan was traded, while Alipay reportedly processed an average of $231 billion (¥1.6 trillion) each month in 2020.
Local media outlet Daily Economic News reported that a hospital in Changshu has already informed its staff that their upcoming salaries will be distributed via personal digital renminbi wallets. Unlike cryptocurrencies, which are prohibited in mainland China, the digital yuan is backed by the country’s central bank. It can be transmitted through near-field communication (NFC) technology, eliminating the need for an internet connection.
As China forges ahead with its digital currency initiative, the implementation of digital yuan salaries in Changshu is expected to provide valuable insights and feedback to further refine and expand the adoption of the e-currency nationwide.
