Civil Servants to Receive Digital RMB Salaries
According to a notice issued by the Changshu Local Financial Supervision Bureau and the Changshu Municipal Bureau of Finance, civil servants including public service personnel, public institution personnel, and personnel of state-owned units at all levels in the city will be compensated in digital RMB payment. An on-site staff member of a local hospital confirmed that the workforce would receive payments in digital yuan starting next month. Moreover, employees can opt for digital yuan settlements through self-service terminals.
China’s Push for CBDC Adoption
The Chinese government has been pushing for the widespread adoption of its CBDC, and Changshu’s decision to pay civil servants in digital RMB is part of this effort. Jiangsu Province, where the city of Changshu resides, previously initiated a pilot program for digital RMB in Q1 2023. The objective, according to a local report, is to establish an efficient and convenient digital RMB operation and management system by 2025.
Related: China’s central bank includes digital yuan in report on currency circulation
Despite China’s efforts to promote the adoption of CBDC, it has not been well-received by Hong Kong residents. During the Lunar New Year period, multiple Chinese city governments gave away over 180 million yuan ($26.5 million) worth of CBDC to boost adoption. However, in the first four days of the digital yuan hard wallet launch, only 625 Hongkongers had signed up, despite a 20% discount on purchases from 1,400 local vendors subsidized by the government for CBDC owners.
Conclusion
Changshu’s decision to pay civil servants in digital RMB is part of China’s push for widespread adoption of its CBDC. The country’s objective is to establish an efficient and convenient digital RMB operation and management system by 2025. However, the lack of adoption of CBDC by Hong Kong residents despite government subsidies highlights the challenges of promoting widespread adoption of digital currencies.
