According to local media reports, a significant portion of Chinese population and businesses are adopting the digital Yuan for paying out their taxes. The use of central bank digital currency (CBDCs) by masses mark a major achievement for the nation’s targets.
As per recent reports from state organs, and government-owned banks, Chinese citizens and firms are actively using the CBDC to pay their taxes. Sources reveal that the claims were made by Hunan Province’s Tax Bureau, as well as the Changsha Central branch of the People’s Bank of China (PBoC), the Chinese central bank.
Adding figures to the report, the agencies revealed that from January to June 2023, individuals and firms settled in Hunan Province “successfully” used the digital Yuan to pay a cumulative total of $51.3 million worth of taxes. Reportedly, the quoted tax figures represents 794 transactions.
Among these transactions, the largest share (754) were carried out via a CBDC tax payment platform operated by the Postal Savings Bank’s Hunan Branch. Additionally, the same bank was responsible for processing 99.58% of the total amount of taxes paid in digital Yuan in the province.
The Postal Savings Bank is majority (69%) owned by the state-run postal service. Additionally, a syndicate of domestic and international public and private firms owns a 17% stake in the bank. Reportedly, the bank has also been one of the closest allies of Chinese central bank in digital-Yuan adoption efforts, and was one of the first banks to develop a “hard” offline digital Yuan wallet solution.
Furthernore, the Hunan branch of the bank was the first in the province to launch CBDC-powered tax solutions. It also allows companies and individuals to pay a “full” range of state levies using the token. Notably, the bank just doesn’t limit to these solutions and also offers digital Yuan tax refund services, allowing local and national tax offices to use the CBDC to make tax reimbursements.
Speaking to media, the Hunan branch said that it would “continue to optimize the digital Yuan payment experience” for its clients. Additionally it stated that it intends to “actively promote the work” of the ongoing “digital Yuan pilot.”
Notably, the wide-scale use of CBDCs to fill out taxes, it signifies a major move of people’s comfort and viability to use it. However, it shouldn’t come out as much of a surprise given the strong advocacy of CBDC by the government and the consistent efforts taken in the direction.
The nation as a whole has been making efforts to make CBDCs more accessible for use by masses. As reported by Todayq News, the the Chinese city of Shenzhen claims that its residents have opened almost 36 million digital Yuan wallets.
Notably, all these developments come just months after Changsha authorities claimed that over 420,000 merchants in the city now accept payments in the CBDC. The CBDC payment options has been very innovatively added to all bus routes in Jinan, capital of Shandong Province.
Along with other ways like giveaways etc., Changshu decided to hand salary to civil servants in digital Yuan from May 2023. Simultaneously, the online payments and shopping applications have also integrated CBDC option making it easier for users.