Changshu: The First Chinese City to Fully Adopt Digital Yuan for Salaries

Changshu, a city in Jiangsu province in eastern China, has announced that it will pay the salaries of some public sector workers “100%” in digital yuan, the country’s official central bank digital currency (CBDC). This is part of a pilot program to promote the use and adoption of the digital yuan, which is also known as e-CNY or DCEP (Digital Currency Electronic Payment).

According to a report by China Daily, Changshu will select 10,000 public sector employees from various fields such as education, health care, and social security to receive their salaries in digital yuan starting from May. The employees will be able to use their digital wallets to pay for goods and services at designated merchants that accept the CBDC. They will also be able to convert their digital yuan into cash or bank deposits at any time.

The pilot program aims to test the feasibility and functionality of the digital yuan in different scenarios and applications. Changshu is one of the several cities in China that have been conducting trials with the digital yuan since last year. The CBDC is expected to enhance the efficiency and security of payments, as well as reduce the costs and risks associated with cash transactions.

The digital yuan is not a cryptocurrency, but a legal tender issued and backed by the People’s Bank of China (PBOC), the country’s central bank. It is designed to complement and coexist with the existing monetary system, rather than replace it. The PBOC has stated that the digital yuan is not intended to challenge the dominance of the US dollar or other international currencies, but to serve the domestic market and meet the needs of the digital economy.