Jiangsu city announces switch to digital yuan

From May, the salaries of civil servants, employees of institutions and state-owned enterprises in Changshu city, Jiangsu Province, will be paid in full in digital yuan, according to a report by Shanghai Securities News.

The report said that the new payment scheme was announced in a notice jointly issued by Changshu's financial regulatory authority and the city's finance bureau.

The city of Changshu in Suzhou has been proactive in promoting the use of digital yuan.

According to the report, since June last year, about 2,540,000 (US$360,000) of subsidies had been paid in digital currency to a number of employees in the public sector in the city.

The Suzhou Daily reported recently that in Changshu, residents could pay using digital yuan for their utilities bills, cable TV fees, or public transports, among others.

By the end of September last year, about 7,000 shops had handled over 2 million transactions in digital currency valued in excess of 70 million yuan.

Nationwide, digital yuan could be handled in 26 regions in 17 provinces and municipalities.

According to experts, relevant work is afoot to create the infrastructure and partnerships so that digital yuan could be used more extensively.

For instance, digital yuan could be used in all payment via Alipay.

However, many businesses have difficulty distinguishing digital yuan from WeChat or Alipay payments.

Experts point to several distinctions. For one thing, withdrawal or transfer of digital yuan would be free of charge.

Another advantage is that payment of digital yuan would be akin to payment via cash, in that no business entities or third party payment platforms could access relevant payment data, so that anonymity and data security could be guaranteed.

Since digital yuan is a legal currency enjoying the same status as cash, nobody or platforms could refuse such payment.

In addition, digital yuan can be paid in the absence of Internet access, or even when the mobile phone has been switched off.

Experts warned that in case of losing a mobile phones the phone owner, to prevent loss of digital yuan, must immediately access the digital yuan app via another phone, so as to suspend, immediately, any payment in the absence of their network or if the mobile phone has been switched off.