Good day everyone,
I hope you are all well and having an excellent week, welcome to CryptoGod-1’s blog on all things crypto. With digital currencies getting more and more popular around the globe, it has emerged that a city in China is looking to becoming the first city in the world who pay its employees entirely in a central bank digital currency.
Chinese Digital Yuan
The Chinese Digital Yuan, which is also known as China's CBDC (Central Bank Digital Currency) is a project which was piloted in around 26 provinces and cities. It was first established back on Tuesday the 4th of January 2022. Also known as the e-CNY, the CBDC project was has been integrated into both Alipay and Wechat Pay, which are two of China's most dominant third-party payment platforms. This means the CBDC can be used as a method of payment on at least 105 different mobile applications which cover the likes of online shopping and the purchase of petrol (gasoline) or natural gas.
To show how serious they are about the project, the Chinese government took many measures to promote the new CBDC within the country. Shenzhen, the country’s southern metropolis with a population of over 17 million in 2021, had about 28 million digital yuan wallets created before the end of 2022 alone. They also gave away about 570 million yuan, which is equivalent to $82.58 U.S. million dollars, as customer subsidies during 2022 which acted as an added incentive for consumers to make use of the digital yuan.
While it is growing in popularity, there are still hurdles ahead and a long way to go before mass adoption. Reports in China suggest that a total of 13.61 Billion digital yuan, or $2 billion U.S. dollar, were in circulation by the end of 2022, which is around 0.13% of the overall total of Chinese yuan.
Changshu City
Changshu is a county-level city which has a population of over 1.5 million and lies under the jurisdiction of Suzhou, the provincial capital of China’s Jiangsu Province. They are aiming to become the first city in the world to pay all of its state employee in only CBDC. As China looks to grow the popularity and use of its digital yuan token, the province is at the forefront of their plans. Located in Eastern China, they are aiming to pay 100% of all the wages of both public officials and any employee of state-owned enterprises with the CBDC from May 2023. This includes all state-run institutions, such as hospitals, state run schools, and media outlets.
The hope within China is that if the pilot scheme is successful then other cities will be able to follow suit. To date public sector workers had been selected to be the first users of the new CBDC when they were requested to use the digital currency to pay for public transport. It began on buses, but has grown to include city wide metro networks and road toll-booths.
Back in May 2020 it was announced that citizens in Suzhou’s Xiangcheng District would be getting paid part of their salaries in the CBDC. The landmark move by Changshu will be the first time that any Chinese public sector workers have received 100% of their salaries in the digital currency.
The move will be watched eagerly around the world, at least as much as we can. Any information regarding how this pans out will likely be a driving factor in other countries issuing their own CBDC. The issues are far from resolved, such as government watch and control over the currencies, and of course being able to track how people spend their money. For now every small step is one in the right direction and I am sure it will develop into something widely accepted throughout China.
Have a great day.
Peace. CryptoGod-1.
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