The Suzhou Government Pays Civil Servants With Digital Yuan, Doesn't Care Many Don't Know How To Use It

Illustration of the city of Suzhou using digital yuan. (photo: twitter @VisitSuzhou)

JAKARTA - Shares related to China's digital currency rose on Monday, April 24, amid a sluggish market, in line with the latest steps taken by China to promote the use of its own central bank digital currency, the digital yuan.

Changshu, a city under the city of Suzhou in eastern Jiangsu Province, will pay civil servants and other public sector employees with salaries in digital yuan starting in May. This was first reported by state media Securities Times on Sunday, April 23.

"This development is the latest trial conducted by China to promote its e-CNY," said Dan Wang, chief economist at Hang Seng Bank China, referring to the digital yuan.

China has become a leader among countries developing the CBDC - a digital token issued by the central bank, although its adoption is still in its early stages.

Shares on Global Infotech Co jumped 13% in the middle of the day, Chutian Dragon Co rose 8%, while Newland Digital Technology Co and Northking Information Technology Co also increased.

On the other hand, the benchmark index fell 0.4% due to concerns that still haunt China's economic recovery.

"Using e-CNY to pay salaries will help popularize digital currencies," said Wang Pengbo, senior financial analyst at the BoTong Analysts consultant.

An employee at a school in Changshu said he had received transportation subsidies in e-CNY since October. Two other public sector employees in the other part of Suzhou said they had received e-CNY as salaries since last year.

However, the three men said they did not find an adequate scenario to consume digital yuan in their daily lives.

"Once I receive a salary in e-CNY, I always immediately exchange it into a traditional yuan," said Yang, a doctor who works at the Suzhou hospital.

"I don't know how to use it, to be honest, no traders around me accept digital yuan," Yang told Reuters, who only gave his last name because it was not allowed to speak to the media.