The Chinese government has taken a bold step in the field of Central Bank Digital Currency (CBDC). A report from local Chinese media clearly states that from May onwards, full wage payments of public sector employees in Changshu, a province in China with 1.5 million inhabitants will be done through digital yuan.
Who will be paid in Digital Yuan?
All the public sector employees of Changshu which includes doctors, school teachers, state government as well as central government employees will be paid in digital yuan. This step is taken by the government to boost the usage of CBDC because people were not aware of it as they preferred using physical cash and other alternatives like Alipay and WeChat.
After implementing this plan, Changshu is all set to compete with the capital Beijing, which is quite ahead in terms of digital currency adoption.
Chinese Central Bank all geared to boost CBDC
The People’s Bank of China (PBOC) is taking all the necessary steps to boost the usage and adoption of CBDC by the common people. In September, the bank directed companies to include digital yuan as one of their payment methods.
After its implementation in June, the city of Changshu has settled payments worth $300,000 in the form of digital yuan.
The US-China trade conflict in March clearly states the importance of adopting an international transaction method. Many analysts believe that it would be very beneficial to settle cross-border payments with the help of digital yuan if it is integrated into international transactions.
Apart from its benefits, most experts also believe that digital yuan lags in adoption and it is just a “substitute cash” which does not have much value to offer to the economy.