Key points

  • State employees in Changshu, a city in China's Jiangsu Province, will receive their salaries in digital yuan from May.

  • This move will extend to employees of government agencies, state-owned enterprises, and public institutions, including state-run schools, hospitals, and media outlets.

  • Digital yuan is China's CBDC project, also known as e-CNY, which is piloted in at least 26 provinces and cities.

  • The digital currency has been integrated into Alipay and Wechat Pay, China's two dominant third-party payment platforms, and can be used for payment on at least 105 mobile applications.

  • Changshu was among the first piloting areas of digital yuan and started to issue digital yuan subsidies to state employees in October 2022.

  • Taicang, another country-level city under Suzhou, started to pay public institution employees' wages in digital yuan in June 2022.

  • Shenzhen saw over 28 million digital yuan wallets established by the end of 2022 and gave out more than 570 million yuan (US$82.58 million) worth of digital yuan in consumer subsidies in 2022.

  • Digital yuan in circulation totaled 13.61 billion yuan (US$2 billion) by the end of 2022, representing around 0.13% of the Chinese yuan at the time.

  • Response to Shenzhen's attempt to promote the CBDC to visitors from Hong Kong in March was less enthusiastic than expected.

According to a report by People’s Daily, the official publication of the Communist Party, state employees in Changshu, a city in Jiangsu Province, China, will begin receiving their salaries in digital yuan from May. The move extends to workers in government agencies, state-owned enterprises, and public institutions, including schools, hospitals, and media outlets.

Digital yuan, also referred to as e-CNY, is China’s central bank digital currency project and is currently being piloted in over 26 provinces and cities. The digital currency has already been integrated into China's two primary third-party payment platforms, Alipay and Wechat Pay. It can be used for payment in more than 105 mobile applications, providing services such as online shopping, and purchasing gasoline and natural gas.

Changshu, a county-level city in Suzhou, the provincial capital of Jiangsu Province, was among the first to pilot the digital yuan project. The city started issuing digital yuan subsidies to state employees in October 2022. Taicang, another county-level city under Suzhou, also started paying public institution employees’ wages in digital yuan in June 2022.

China's government has implemented various initiatives to promote the use of digital yuan. Shenzhen, a southern metropolis with a population of over 17 million, had more than 28 million digital yuan wallets established by the end of 2022, and gave out over 570 million yuan (US$82.58 million) worth of digital yuan in consumer subsidies in 2022, according to a local media report.

However, there is still a long way to go before digital yuan sees widespread adoption in China. The total circulation of digital yuan was only 13.61 billion yuan (US$2 billion) by the end of 2022, representing approximately 0.13% of the Chinese yuan at that time, according to a report by People's Daily in January. Moreover, the response to Shenzhen's attempt to promote digital yuan to visitors from Hong Kong in March was less enthusiastic than expected.

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Source: forkast.news

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