China: Changsu city to pay public sector workers entirely in digital yuan


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by Karen Faulkner, Worthy News Correspondent

(Worthy News) – As part of a new phase in promoting China’s currency, the Chinese city of Changsu in Jiangsu province has confirmed it will start paying its public sector employees entirely in digital yuan, Asia Nikkei reports.

The world’s second-largest economy, China has been testing the use of the digital yuan in Chinese cities since 2020. It could ultimately lead Europe and the United States in the global race to develop a state-backed digital currency.

The People’s Bank of China administers the digital yuan and is paid directly into digital wallets rather than bank accounts.

A city of 1.7 million people, Changsu paid over 4,900 public sector and state-owned enterprise employees in the digital yuan between June and September last year, Nikkei noted. In that city, many more employees will now be paid in digital yuan: in 2018, Changsu counted 14,000 public sector workers.

The province of Jiangsu finalized its plans to use the digital yuan in government procurement, tax collection, and in the collection of social insurance contributions in January this year, Nikkei said. Additionally, to encourage consumption, Changshu will give residents a total of 40 million yuan in the digital currency to buy durable goods that have been slow to sell, Nikkei reports.

While payment of the yuan into digital wallets is touted as keeping administrative costs down, critics are concerned the Chinese government would be given unprecedented access to information on what people are spending their money on and where.

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