The increasing adoption and use of digital yuan, China’s central bank digital currency or CBDC, by its citizens and firms is becoming more prominent. According to the Hunan Province’s Tax Bureau and Changsha Central branch of the People’s Bank of China (PBoC), they have recorded tax payments through the digital currency reaching up to $51.3 million from January to June 2023, suggesting the currency’s practical use is taking off.
However, it’s essential to highlight that most of these transactions accrue from a CBDC tax payment platform operated by the Postal Savings Bank’s Hunan Branch. This institution processes almost all (99.58%) taxes paid through the digital yuan in the area. It is no ordinary bank; 69% of the Postal Savings Bank ownership comes under the state-run postal service, China Post. Rest 17% of the stake in the bank is owned by an international and domestic public and private firms consortium.
One could argue that these entities’ close ties might unconsciously sway the use and acceptance of the digital yuan to an extent. After all, the Postal Savings Bank was one of the foremost banks to develop the “hard” offline digital yuan wallet solution, and it was the first to provide CBDC-powered tax solutions in the province. Additionally, it gives digital yuan tax refund services.
The bank’s recent statement about continuing to enhance the digital yuan payment experience and actively promoting the work of the ongoing digital yuan pilot program highlights their firm commitment.
Even more intriguing is the report from Changsha, a large city in the province. The city administration notes that an impressive 420,000 merchants in the city are now accepting payments in the digital yuan, and the use of digital yuan promotional discount coupons has exceeded 90%, with some regions reaching a stunning 99%.
However, one must also question whether the adoption of digital yuan is inherent, voluntary, or driven by the thrust from certain sections.
Overall, it seems that while the digital yuan reaches new heights in tax payments, the connections and operational intricacies pose questions. Complexity reduction and stability are keys to future success—as the story unfolds, true CBDC adoption might not be as simple as it currently appears.
Source: Cryptonews
