Interestingly, a rising number of Chinese firms are resorting to the digital yuan as a viable medium of salary payment. In a recent development, a state-run bureau that administers finances for the Zhongkai High-tech Industrial Development Zone, embarked on personally witnessing the effectiveness of the CBDC.
This particular Development Zone finds its roots in Guangdong Province and has been functional since 1993 as part of a broader tri-region development project comprising Guangdong, Hong Kong, and Macao.
This proactive bureau has joined forces with the Huizhou Branch of the Industrial and Commercial Bank of China (ICBC) to transit CBDC salary payments – marking itself as the city’s maiden company to compensate its workforce in digital yuan. Surprisingly, this includes both conventional personnel and CCP-appointed officials.
As per the local branch of the central People’s Bank of China (PBoC), such a strategy serves as an ideal application scenario for the e-CNY whilst advancing Digital Yuan adoption and usage frequency in Huizhou. The bank underlines that the experience gathered would also brush up Huizhou’s knowledge of digital governance officials about the CBDC while expanding its application in the public sector.
This move directed the bureau’s staff into opening digital yuan wallets to receive their remuneration. The ICBC backed this plan and expressed hopes for exploring more CBDC applications in government affairs, financing, and service sectors, further strengthening the ‘government-bank’ affiliation.
Over 571,000 personal digital CNY wallets and 49,000 corporate wallets have reportedly been activated in Huizhou. Alongside this, around 110,000 merchants have started accepting this form of coin, resulting in some 2.21 million transactions worth nearly $1.3 billion.
This comes after the government of Suzhou’s Xiangcheng District proposed paying a part of their staff’s monthly wages in digital yuan in May 2020. This year, Changshu declared its plans that all public officials and state-owned enterprise employees would be paid in digital yuan by May 2023.
Echoing these sentiments, leading Chinese academia proposes that CBDC’s like the e-CNY can facilitate non-Western nations like China itself in overcoming the longstanding US dollar dominance through bilateral or multilateral cross-border transactions. This certainly adds a new angle to the entire plot surrounding the future of currencies in the upcoming era of digital finance.
Source: Cryptonews
