China’s Changshu city to pay civil servant salaries in digital yuan

Tom Zuo
2 min read
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State employees in Changshu, a city in China’s Jiangsu Province, will receive their salaries in digital yuan from May, as China’s central bank digital currency (CBDC) makes inroads in daily use, according to a Monday report by the Communist Party’s publication People’s Daily.

See related article: China’s WeChat social media giant integrates digital yuan into payment platform

Fast facts

  • The move will extend to employees of government agencies, state-owned enterprises and public institutions – such as state-run schools, hospitals, media outlets.

  • Digital yuan, also known as e-CNY, is China’s CBDC project that is piloted in at least 26 provinces and cities. The digital currency has been integrated into Alipay and Wechat Pay, China’s two dominant third-party payment platforms, and can be used for payment on at least 105 mobile applications, covering services from online shopping to buying gasoline and natural gas.

  • Changshu is a county-level city with a population of over 1.5 million under the jurisdiction of Suzhou, the provincial capital of China’s Jiangsu Province. Changshu was among the first piloting areas of digital yuan, and started to issue digital yuan subsidies to state employees in October 2022.

  • Changshu is not the first Chinese city to issue digital yuan salaries. As early as June 2022, Taicang, another country-level city under Suzhou, started to pay public institution employees’ wages in digital yuan for the first time in the country, according to a local government report.

  • China’s governments have taken a series of initiatives to promote the country’s CBDC. Shenzhen, the country’s southern metropolis with a population of over 17 million in 2021, saw over 28 million digital yuan wallets established by the end of 2022, and gave out more than 570 million yuan (US$82.58 million) worth of digital yuan in consumer subsidies in 2022, according to a local media report in February.

  • But the digital yuan has some way to go before mass adoption in China. According to People’s Daily in January, digital yuan in circulation totaled 13.61 billion yuan (US$2 billion) by the end of 2022, representing around 0.13% of the Chinese yuan at the time. Response to Shenzhen’s attempt to promote the CBDC to visitors from Hong Kong in March was also less enthusiastic than expected.

See related article: China’s digital yuan needs WeChat, Alipay to boost adoption, experts say

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