ISLAMABAD: China seems to be the first country in the world that has started paying salaries to employees in Digital Yuan. In China some district governments and mega companies have started paying salaries to employees in Digital Yuan. China’s Xiong’an district has started paying salaries to employees in Digital Yuan. Xiong’an district is a new area that China uses for experiments pertaining to financial and economic matters.
Meanwhile, some mega companies such as JD.com, and Ali Baba, etc., too are paying wages to their employees in the digital currency of China. Gradually, the number of companies paying salaries to their employees in newly developed Digital Yuan is increasing in China.
Chinese digital yuan is the central bank digital currency. People’s Bank of China, the country’s central bank, has issued Digital Yuan after evolving a fool-proof strong block-chain mechanism to secure the currency and control it at all levels. China first carried out experimental trading of Digital Yuan in its selected major cities such as Shenzhen, Chengdu, and Suzhou for over a year period and then allowed payment of salaries in Digital currency of China.
Importantly, China has developed its central bank digital currency (CBDC) after seeing rapid penetration of Bitcoin and other cryptocurrencies throughout the world. A difference between cryptocurrency and digital currency is that crypto is decentralized currency which is not controlled by any country’s central bank, whereas, digital currency is issued with the backing of the government and the central bank. In China, the Digital Yuan will be issued to the account holders through Chinese commercial banks.
In China, fiat currency (government-backed currency notes) are being used massively. Experts believe that in coming two to three years, China will be able to reduce its currency in circulation by 15-20 percent by using Digital Yuan. Distribution of DY will be carried out through two-tier system _ the People’s Bank of China (PBOC) will issue digital yuan to commercial banks which will pass on this currency to their customers. Options will also be available for the account holders to draw cash from ATMs for different purposes.
