China is among the largest nations in the world, that is experimenting extensively with its CBDC initiative. In a fresh development, China’s Changshu city has reportedly decided to compensate all civil servants within its jurisdiction in the form of the e-CNY CBDC. This marks the first time that the Chinese CBDC has been recognised as a salary payment mode by a region there. A CBDC or a Central Bank Digital Currency is just a virtual representation of any nation’s fiat currency on the blockchain. China’s e-CNY is, hence, the digital version of the country’s Yuan currency.
Starting May, government staffers in the Changshu city of China will receive their monthly salaries in the form of the e-CNY CBDC, local publications reported from the Asian nation.
The decision has reportedly been finalised by the financial authorities that govern the city of over a million people in population.
The e-CNY CBDC will become a salary mode for people working in Changshu’s public service, public institutions and state-owned units at all levels.
Despite banning all crypto-related activities in 2021, China did not stop its research around the usecases of the blockchain technology that provides the underlaying support for crypto and Web3.
Between 2020 and 2022, China launched its e-CNY app to facilitate payments through its CBDC.
The reason why China kept a positive approach towards the CBDC initiative is because transactions via the digital currency are recorded permanently on the blockchain, making financial history transparent and credible on the records. In addition, the use of CBDCs for daily payments would also eliminate the need for central banks to invest heavily in managing and maintaining cash notes.
Around April 2022, China made its CBDC trials available in 23 cities including Shanghai, Beijing, and Shenzhen. Residents of this city were allowed, in fact encouraged to pay for goods and services with the e-CNY, China-Briefing had said at the time.
President Xi Jinping’s government is trying out different ways to advertise the uses of the e-CNY CBDC.
In December last year, the Chinese government allowed existing CBDC users to gift CBDCs instead of cash gifts to each other around the New Years celebration.
China is not the only country that is accelerating its CBDC efforts. India has also entered into an advanced phase of testing its e-Rupee digital currency wherein select banks and retailers are helping testers facilitate payments. In the coming days, India will expand CBDC uses in more cities.
After India and China, Pakistan and Hong Kong are also pacing towards launching their respective CBDCs.
Pakistan plans to release its digital currency by 2025, the country’s central bank, the State Bank of Pakistan (SBP) had decided to select and licence electronic money institutions (EMIs) to issue e-money to facilitate digital payments.
The administration of Hong Kong is currently working on the roadmap to introduce the e-HKD CBDC to its estimated population of over 7.5 million in the coming months.
Source: News