Civil servants and other public sector workers in the eastern Chinese city of Changshu will be paid solely in digital yuan starting in May, marking the biggest push of the e-currency to date.

A document posted on a government website said the effort would promote an ongoing pilot of digital renminbi in Jiangsu Province.

According to local media Daily Economic News, a hospital in the city has already notified its staff that their next salaries will be distributed in digital renminbi via a personal wallet. The currency needs no internet connection to work as it can be transmitted through NFC.

The city already has many of its services payable via the digital yuan, including water and gas, cable TV and public transport. Unlike cryptocurrency, which Beijing bans on the mainland, the digital currency is backed by China's central bank. The digital currency received a boost when it was tested during the 2022 Olympics, and since then has been incorporated into Alibaba's payment platform, Alipay. Personal wallet apps are available on Apple and Android.

The digital yuan is supported by six state-owned banks and four others - China Merchants Bank, Industrial Bank, WeBank, and MYbank - and is hoping other financial services will bridge the gap to use.

A Beijing-controlled currency with a detailed blockchain record of how and where money is spent is obviously desirable to the Chinese government.

However, its adoption has failed to gain traction, with around $14.5 billion (¥100 billion) traded from its inception until last August. Comparatively, Alipay reportedly processed $231 billion (¥1.6 trillion) on average each month in 2020.

One problem with its adoption is a lack of places to spend the money. One public servant in Changshu told Reuters that once they receive the e-currency, they immediately convert it to traditional yuan: nearby merchants don't accept it.

Pilot programs continue to push forward the use of the digital currency in 17 provinces in the hopes of being regionally integrated and used regularly by 2025. ®

https://www.theregister.com//2023/04/26/changshu_digital_yuan/