Starting May 2023, all civil servants in the Chinese city of Changshu will receive their salaries in digital yuan, according to reports from local sources. Financial authorities in the city have issued a notice announcing that personnel in public service, public institutions, and state-owned units at all levels will be compensated in digital yuan. The move is part of a wider push towards a more efficient and convenient operation and management system by 2025, according to a local report.
The announcement comes after multiple Chinese city governments gave away over 180 million yuan ($26.5 million) worth of the central bank digital currency (CBDC) during Lunar New Year celebrations earlier this year to boost adoption. The Jiangsu province, where Changshu is located, initiated a pilot program for the digital yuan in Q1 2023, with the objective of promoting its use in the region.
Related: The “War On Crypto”: Is It Unique To America?
While the Chinese government has been pushing for CBDC adoption, it has not been well received by residents of Hong Kong. Despite a 20% discount on purchases from 1,400 local vendors subsidized by the government for CBDC holders, only 625 residents had signed up for the digital yuan wallet in the first four days of its hard launch.
In Changshu, however, employees reportedly have the option to receive digital yuan settlements through self-service terminals, suggesting a more accessible and user-friendly approach to CBDC adoption. The move towards digital yuan salaries for civil servants may also be seen as a way to increase the currency’s usage and adoption across China, with Changshu being a significant player in the country’s economy.
Overall, the adoption of CBDCs like the digital yuan marks a significant shift towards a cashless society, with digital payments becoming increasingly prevalent in countries around the world. While concerns around privacy and surveillance remain, the convenience and efficiency of digital currencies have already proved attractive to many, with their wider adoption seemingly inevitable.