Changshu, a city in China, has announced that all civil servants within its jurisdiction will be paid their full salaries in digital RMB or digital yuan starting from May 2023. The move is in line with the Chinese government’s push for the adoption of its central bank digital currency (CBDC).
The notice was issued by the Changshu Local Financial Supervision Bureau and the Changshu Municipal Bureau of Finance, and covers civil servants including public service personnel, public institution personnel, and personnel of state-owned units at all levels in the city. According to reports, even the staff at a local hospital confirmed that they would be receiving payments in digital yuan from next month.
To facilitate the adoption of the CBDC, employees can opt for digital yuan settlements through self-service terminals. However, the Chinese government’s push for adoption has not been well-received by Hong Kong residents. During the Lunar New Year period, multiple Chinese city governments gave away over 180 million yuan ($26.5 million) worth of the CBDC to boost adoption.
Despite a 20% discount on purchases from 1,400 local vendors, subsidized for CBDC owners by the government, only 625 Hong Kong residents had signed up in the first four days of the digital yuan hard wallet launch.
The lack of adoption in Hong Kong is a cause for concern for the Chinese government as it seeks to promote the digital yuan as an alternative to other forms of payment, including traditional bank deposits and electronic payment platforms such as Alipay and WeChat Pay.
The move by Changshu to pay civil servants in digital yuan is a significant step towards the widespread adoption of the CBDC in China. With the Chinese government continuing to promote its use, it remains to be seen whether the digital yuan will become a viable alternative to existing payment methods.
