According to an official report, employees in Changshu, China, will receive their salaries in digital Yuan from May 2023. The digital Yuan is China’s CDBC (Central Bank Digital Currency) and the central bank is pushing for more adoption. China’s digital currency, dubbed e-CNY, saw pilot projects in at least 26 provinces and cities.
Changshu has a population of more than 1.5 million. The region is a county-level city under the administration of Suzhou, Jiangsu Province’s provincial capital. The city was one of the first piloting regions for the digital yuan. Moreover, in October 2022, Changshu began to provide state personnel with digital yuan subsidies.
The move will include employees of public institutions, state-owned businesses, and government agencies. The two most popular third-party payment services in China, Alipay and WeChat Pay, have both integrated e-CNY. Additionally, users can use the currency to make purchases on at least 105 mobile applications, including those for online shopping and the purchase of gasoline and natural gas.
Will we see more use of China’s digital Yuan globally?
China has launched a number of efforts to promote the digital Yuan. Over 28 million digital yuan wallets were created by the end of 2022 in Shenzhen, the southernmost metropolis of the country. The region has a population of over 17 million in 2021.
According to reports, in 2022, the government provided consumer subsidies totaling more than 570 million yuan ($82.58 million) in digital Yuan. However, the digital Yuan has a long way to go before becoming a standard currency. By the end of 2022, the total amount of digital yuan represented around 0.13% of the Chinese yuan at the time. The figure amounts to about 13.61 billion yuan ($2 billion).
However, demand for China’s national currency has increased over the last few months as more and more countries move away from the U.S. Dollar. However, the USD is still dominant when it comes to international trade. With that being said, demand for the digital Yuan could see an increase with more countries lining up to accumulate on Yuan reserves.