Changshu Civil Servants to Receive Digital Yuan as Payment
Changshu, a city located in the Jiangsu Province of China, has issued a notice stating that all civil servants in its jurisdiction will be paid their full salaries in digital RMB or digital yuan from May 2023. This means 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 payment.
The notice was issued jointly by the Changshu Local Financial Supervision Bureau and the Changshu Municipal Bureau of Finance. In addition to civil servants, an on-site staff member of a local hospital confirmed that the workforce would also receive payments in digital yuan starting next month. Moreover, employees can opt for digital yuan settlements through self-service terminals.
This move is part of China's pilot program to establish an efficient and convenient digital RMB operation and management system by 2025. The province of Jiangsu, where Changshu is located, has initiated this pilot program for digital RMB in Q1 2023.
China has been pushing for the adoption of its central bank digital currency (CBDC) or digital yuan in recent years. In fact, several Chinese city governments gave away over 180 million yuan ($26.5 million) worth of the CBDC during the Lunar New Year period in February 2023 to boost adoption.
However, the government's push for CBDC adoption has not been well-received by residents of Hong Kong. In the first four days of the digital yuan hard wallet launch, only 625 Hong Kong residents had signed up, despite a 20% discount on purchases from 1,400 local vendors, subsidized for CBDC owners by the government.
The lack of adoption in Hong Kong is due to various factors, including concerns about the potential loss of privacy and autonomy, as well as uncertainty about the long-term stability of the digital yuan. Despite this, China is pushing ahead with its CBDC adoption plans, and Changshu's decision to pay its civil servants in digital yuan is just one example of this ongoing effort.