China Surges to Integrate Digital Yuan into Its Financial System

Chinese digital currency-related stocks jumped on Monday in a weak broader market, amid the latest measures that China is taking to promote the use of its own central bank digital currency (CBDC), the digital yuan.

Digital yuan use will expand to cross-border trades and civil servant salaries. China makes another move on the way to integrating digital yuan into its financial system. Several regions are heard to test the central bank digital currency (CBDC) to explore proven ways of distributing digital assets across different groups of Chinese citizens.

Following the official report in the South China Morning Post, some cities have already been using specific applications that were built to help the government expand the digital yuan mainly across the Jiangsu province.

Cross-Border Trading with the Digital Yuan

The city of Xuzhou was chosen as the starting point for the CBDC distribution, as it is the departure point for numerous trains heading for Europe with different goods. It is a direct sign from the Chinese government that the country will promote the use of digital currency for cross-border trading. Xuzhou connects 18 cross-border railways that send goods trains to more than 20 European and Asian nations.

The citys municipal government will use the initiative to handle different transactions that involve paying for storage changes, goods carrying services, and so on. They also plan to use digital currency to pay utility services, carrying costs, taxes, etc.

CBDC for Civil Services

As for the civil sector, the digital yuan is being tested in the province city of Changshu. Around 1,5 million residents will get a chance to get paid in digital currency starting from May. They generally include public institution workers (state enterprise employees, medical staff, technicians, school teachers, journalists, etc.).

The city was among the first locations to be chosen as the location to test the pilot version of using the digital yuan as the main payment for local employees. Some regions have already started paying wages in CBDC.

It is just a matter of time before the digital yuan will be delivered to the financial market.