The announcement on April 21st that a city in eastern China will pay civil servants and public institution employees solely with digital currency starting in May has garnered significant attention.
Changshu is a city at the county level that falls under the jurisdiction of Suzhou, Jiangsu province. It is located in the Yangtze River Delta region. According to Yicai‘s report, an insider from the local banking industry stated that the trading volume of digital currency, also known as the e-CNY, serves as one of the high-quality assessment indicators. Prior to this development, certain areas within Suzhou have already begun compensating civil servants and individuals working for public institutions and state-owned enterprises with digital currency.
A local hospital in Changshu has notified its staff that they will receive their salaries next month using digital RMB, according to a report by Daily Economic News. Furthermore, the manual settlement window’s staff stated that they currently support digital RMB payment for registration and checkout.
Employees will receive their salaries in the form of digital RMB through their personal wallets, which they can access after opening them. This method is more secure and convenient for employees as it does not require internet connectivity. In Changshu, digital RMB payment channels have been fully integrated into various payment scenarios such as water bills, gas bills, communication fees, cable TV fees and public transportation.
Earlier this year, Jiangsu Province initiated a pilot program for digital RMB. The objective is to establish an efficient and convenient digital RMB operation and management system by 2025.
The People’s Bank of China meticulously chooses commercial banks based on their capital and technological capabilities for the digital RMB system. Currently, it has selected 10 designated operating institutions after a comprehensive evaluation process. These include six state-owned banks, as well as China Merchants Bank, Industrial Bank, WeBank, and MYbank.
To ensure the widespread availability of digital RMB, The People’s Bank of China has authorized nonbank financial companies and payment institutions to actively participate in providing digital RMB circulation services alongside designated operating institutions. This move is considered a “bridge” that connects operating institutions with the public within the digital RMB system.