China is stepping up efforts to popularize the use of a central bank digital currency (CBDC) — the digital yuan, or e-CNY — as the project approaches its planned nationwide rollout.
Starting in May, civil servants in Changshu will receive their salaries in digital renminbi. This also includes employees of state-owned enterprises and all public sector employees such as teachers, doctors and nurses.
CBDC in a cashless society
The city of Changshu, located in eastern China’s Jiangsu province, has been participating in the CBDC project for some time, with the city paying transportation subsidies for some civil servants via e-CNY.
Many cities in China have experimented with e-CNY in different ways since its introduction in 2020. But paying hundreds of thousands of people with a digital yuan is an unprecedented push from governments to force the adoption of digital currencies.
Chinese society is largely accustomed to going cashless, with over 80% of the population owning smartphones with digital payment apps thanks to the e-commerce boom of the last two decades.
However, the digital payment needs of Chinese citizens are currently being met by privately owned applications such as Alipay. Critics say the government wants to change that and make even the digital financial system directly controlled by the central bank.
eRMB
China’s central bank introduced a digital yuan in 2020 as a take on what a central bank digital currency should be. It was developed in collaboration with the Blockchain-Based Service Network (BSN) on our in-house blockchain network.
BSN is China’s state-owned digital infrastructure company.
Despite claiming blockchain technology, the digital yuan does not share many characteristics with cryptocurrencies and is highly centralized. It is issued and managed by the People’s Bank of China and is intended to be the digital equivalent of the country’s legal tender.
Since the introduction of the digital yuan, the central bank has been rolling it out in phases, with many cities participating in pilot tests before rolling it out at the national level.
The post, in which China stepped up efforts to promote CBDC adoption, first appeared on CryptoSlate.
