July 2, 2022
  • July 2, 2022

China tests digital yuan in salary payments

By on June 15, 2021 0

The digital yuan is now in play in the new Chinese zone of Xiong’an, CoinDesk reported.

The district, located about 100 kilometers south of Beijing, has served as a testing ground for new economic ideas, according to the report. The digital yuan, a central bank digital currency (CBDC), will be used there to pay some workers.

Xiong’an’s government said the digital yuan pilot project was the country’s first “chain” payment used for builders’ wages, according to the report. The region will use the Blockchain Fund Payment platform to pay salaries.

According to Xiong’an, according to CoinDesk, the Shijiazhuang branch of the People’s Bank of China (PBOC) and the Xiong’an Management Committee Reform and Development Office both helped guide and manage the project.

China is quite advanced in its tests of the digital yuan, according to the report. It has done so in several different regions over the past year, and has put in place a legal framework for the CBDC with various global financial regulators. The PBOC’s digital currency testing involved commercial banks and payment providers.

China does not want the currency to be seen as a “weapon” against the US dollar, which is still the primary vehicle for international transactions in China, PYMNTS reported. Vice-governor of the central bank, Li Bo, said in April that tests carried out so far have shown that digital currency works well in China’s financial system.

He said that there is currently no timeline for the expansion of the digital yuan’s regulatory framework, although the expansion will eventually occur. This will include visitors to next year’s Winter Olympics who will be able to use the currency, as well as the currency configured for the use of cross-border payments.

Officials also maintained that the digital yuan would not replace the paid digital services of several big contenders like Group of ants‘s Alipay and Tencent HoldingsWeChat Pay.

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