China has made a major push in its ambitious digital yuan project. Public servants in the eastern Chinese city of Changshu, located in the province of Jiangsu, will be paid fully in digital Yuan as the country is making significant moves toward popularizing the currency.

The new payment process will begin in May according to an official release posted on Government websites. According to state media, this will be the biggest rollout of the currency also known as e-CNY. 

All Government employees in the city including staff at state-owned companies, and public institutions such as hospitals, schools, research institutes, libraries, and media organizations will be affected.

Changshu, a city housing 1.7 million residents, had already begun to run experiments with the digital yuan, a type of money existing only online and is backed and managed by China’s central bank. Similar to cryptocurrency, some elements of blockchain technology were incorporated into the digital yuan: Every transaction is traceable and recorded in a digital ledger.

Since October last year, Changshu has been making use of the digital yuan to pay the transit subsidies for some government employees.

China is already edging closers to becoming a cashless society, but the majority of the electronic transactions are carried out on privately owned apps (WeChat Pay and Alipay), outside of the immediate knowledge of the state.

An official Yuan will change that narrative, giving Beijing an unmatched amount of information about what people spend their money on and where it is spent.

The world’s second-largest economy has been trying out the digital Yuan in Chinese cities since 2020, as it prepares for a national rollout that has the capacity to put China ahead of the United States and Europe in the global race to develop a digital currency that is backed by the state, also known as central bank digital currency (CBDC).

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