Chinese city uses digital yuan for salaries

China completed an outright ban on cryptocurrencies in 2021, citing issues related to the fight against financial crime

The Chinese city of Changshu will start paying its employees using local digital currency, as the Asian nation continues to expand the digital yuan project after its final ban on all independent tokens in 2021.

All the city’s civil servants will receive their salaries using an electronic currency developed by the People’s Bank of China, part of Chinese government’s response to the ban on private cryptocurrencies.

Changshu is the latest city to decide to pay the salaries of its civil servants in the central bank digital currency (CBDC), with the process starting in May 2023.

Chinese authorities have argued the decision to ban cryptocurrencies was motivated by a determination to curtail financial crime, and that the digital yuan would make it impossible for criminals to operate. At the time of the ban being announced, the price of Bitcoin immediately fell by almost $2,000.

Governments around the world have continued to raise concerns that digital currencies have the potential to increase financial risk, and could infringe on governmental control of monetary systems. Several other nations (such as Egypt, Indonesia and Ghana) have also introduced outright bans cryptocurrency bans.

The value of digital yuan in circulation had reached 13.6bn yuan ($2bn) by the end of 2022, according to the People's Bank of China. The figures appeared in a January 2023 statement from the China’s State Council, the nation’s chief administrative authority.

On February 6 this year, a number of Chinese city governments gave away $26.5m in digital yuan during Lunar New Year celebrations, as a way to boost the popularity of the token, and raise the profile of the token.

Chinese authorities have repeatedly dismissed privacy concerns around the new currency, arguing its CBDC system can help balance the need to protect personal privacy while combating illegal activities.

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Written by Barney

Co-founder

Barney is co-founder of CryptoGamblingNews.com. When not at work he can usually be found behind a Nikon. He's won numerous international competitions for his photography and volunteers as a content creator for aid organisations in Africa.

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