Changshu, a city located in Jiangsu Province, China, has announced that civil servants will be paid in digital RMB or digital yuan from May 2023. The move is part of the Chinese government’s push for CBDC adoption, which has seen mixed success so far. While some cities like Changsha have seen a significant surge in CBDC adoption, other areas like Hong Kong have been slower to embrace the digital currency.
The Changshu Local Financial Supervision Bureau and the Changshu Municipal Bureau of Finance issued a notice stating that civil servants including public service personnel, public institution personnel, and personnel of state-owned units at all levels in the city will receive their salaries in digital yuan. The local hospital staff in Changshu also confirmed that they would receive payments in digital yuan starting next month, with the option to opt for digital yuan settlements through self-service terminals.
Changsha, another Chinese city, has seen significant progress in CBDC adoption, with more than 420,000 merchants accepting payments in the digital yuan. According to officials, the city has 22 million digital yuan wallets, and 800,000 “public” wallets have been opened for use by firms and government organizations based in Changsha.
However, the lack of adoption in Hong Kong has been evident despite a 20% discount on purchases from 1,400 local vendors. Only 625 Hong Kong residents signed up for the digital yuan hard wallet during its launch, showing resistance to the Chinese government’s push for CBDC adoption.
In February this year, major Chinese cities like Shenzhen, Jinan, and Lianyungang launched approximately 200 activities involving the digital yuan during the Spring Festival, aiming to boost adoption during the largest holiday in the country. The local government started digital yuan activities worth more than 180 million yuan ($26.5 million) in several cities to encourage usage during the Spring Festival.
China’s push towards CBDC adoption also highlights the country’s focus on digital innovation and its commitment to remaining at the forefront of the digital economy. As the world becomes increasingly digitized, China is positioning itself as a leader in this space, with significant investments in areas like artificial intelligence, blockchain, and digital currencies.