China to use cryptocurrencies to pay salaries to civil servants

Chinese civil servants will take part in a pilot program to pay salaries in digital yuan (e-CNY). Starting from May 2023, public sector employees working in Changshu City will be paid in digital yuan only.

Civil servants will be transferred to wallets for storing virtual currency issued by the Central Bank of China. According to the government, CBDCs are already integrated into various services, so employees will be able to easily pay for services and purchase various goods with digital yuan, such as public transportation and the Internet.

The authorities of the Jiangsu province, where Changshu is located, have been tasked with creating an «efficient and reliable system for managing the operation of a digital yuan-based payment platform» by 2025. To fulfill the order of the Communist Party of China, officials plan to transfer public employees of other cities in Jiangsu to receive their salaries from CBDC in a few years.

Last year, the People’s Bank of China made significant progress in popularizing CBDC. The digital yuan is already used in 15 regions of the country. In 8 months, the amount of transactions in e-CNY exceeded 100 billion yuan (about $ 14.5 billion).

As a reminder, after the announcement of the start of CBDC testing in China, the US government announced that it would start working on the launch of a national cryptocurrency. One of the main reasons for the development and launch of a national cryptocurrency in the United States was China’s active actions. The U.S. Financial Services Committee believes that the launch of the Chinese CBDC will have a negative impact on the American economy, so the only solution is to be proactive by developing its own digital dollar.