In order to become the first city to pay all of its employees solely with a central bank digital currency, a Chinese city hopes to achieve a world first (CBDC).

A major victory for the People’s Bank of China (PBoC) and its digital yuan token would result from the action.

According to the Shenzhen Securities Times, Changshu, in Jiangsu Province in Eastern China, plans to start using the CBDC as of next month to pay “all of the wages” for “public officials and the employees of state-owned firms.”

A satellite city of Suzhou with a population of about 11 million, Changshu is located close by.

Changshu is home to over 1.5 million people, and if everything goes according to plan there, it is anticipated that the rest of the pilot will as well.

Additionally, city officials said that all “employees working in state-run institutions, like as public hospitals,” would also receive their pay in digital yuan.

In the rapidly expanding pilot zone, many of shops and outlets currently accept the digital yuan as a form of payment.

In addition, it is frequently used as a form of payment at toll booths all throughout the country and in transportation networks.

Interestingly, the digital yuan can also be used at the majority of significant online retailers, including the ecosystems of Tencent and WeChat, JD.com (China’s version of Amazon), and businesses associated with Alibaba.

Adoption of CBDC: A Sharp Increase in China?

Employees in the public sector have so far been the ones who have firsthand experience with new CBDC usage cases.

During the pilot’s initial stages, public employees were required to use the token to pay for public transit in a few chosen cities.

This initially appeared on public buses, but it has subsequently spread to include the entire city’s metro networks.

Suzhou has frequently been in the centre of developments.

The Xiangcheng District of Suzhou declared in May 2020 that it would begin paying “part” of the staff members’ monthly salaries in digital yuan.

Yet, the Changshu experiment will be the first time that any Chinese employees in the public sector have received 100% of their salary in the PBoC’s currency.

A CBDC tax payment portal was introduced by the city of Huizhou in March, as other localities declared they were looking into equivalent options.