According to the “Shanghai Securities Journal” of Xinhua news agency, the pilot will involve local government officials and employees of state-owned enterprises.
Overtime payments of more than 4,900 employees in public enterprises in the city have been made in electronic currency since June 2002.
The city government also paid some subsidies to technology companies, as well as transportation and housing benefits to public employees in e-CNY.
With the plan announced in February, the Ciangsu provincial government announced that it will expand the use of the digital yuan by 2025, to be used in public procurement, tax and social security payments, and education and health expenditures.
The decision to make salary payments in digital currency is seen as an important step towards promoting the use of the e-Yuan.
The official digital currency, called “e-CNY”, was launched in Chinjin, Sucou, Chingdu and Xiaongan New Zone with a pilot application launched in 2020.
It was reported that transfers made with digital currency reached 87.57 billion yuan ($ 13.78 billion) by the end of 2021.
In 2022, the People’s Bank of China expanded the scope of the pilot application and released a mobile application that can be used as an electronic wallet for the digital yuan in Apple’s iOS and Google’s Android stores.
The mobile application was put into service in 12 cities and regions, including the cities of Shanghai, Xinjin, Qingdu, Changsha, Sucou, Xian, Qingdao, Dailan, the Xiaongan New Zone in Hainan province, Hibey province, and the facilities and areas in Beijing and Canjiakou cities, where the Winter Olympics will be held.
Online payment systems are common, cash usage is low
In China, where online payment systems are widely used, the use of cash has already decreased considerably.
Internet companies Ant Group’s Alipay and Tencent Holding’s WeChat Pay payment services are more in demand than cash transfers.
The Beijing administration argues that the digital yuan will protect the privacy of citizens’ personal data by limiting their online platforms’ access to data on money transfers. However, concerns are also expressed that the system, which will allow the public authority to instantly monitor all money transfers in the currency under its control, will increase the government’s control over the economy and finance.