China is slowly heading towards the launch of its official central bank digital currency (DC/EP) and decided to issue it to local government employees.
According to a report by local news daily China Star Market, the municipal government employees of the city of Suzhou will receive 50 percent of their transportation subsidies for May in the digital currency.
The DC/EP payments will be made through four state-owned banks – the Agricultural Bank of China, the Industrial and Commercial Bank of China, the Bank of China, and the China Construction Bank.
The official statement also asked the local government bodies to enter into an agreement with the mentioned banks before May for the smooth initial distribution of the digital currencies.
Employees will receive the digital currencies in the wallets developed by these banks.
Can the world regulators catch up with China?
When central banks around the world are studying the feasibility of issuing digital versions of their fiats, the People’s Bank of China (PBoC) is preparing the launch of its digital currency.
The central bank has also partnered with local tech giants, including AliPay, the payment subsidiary of Alibaba, for the development of the digital currency. AliPay also disclosed five patents related to the DC/EP.
Earlier, media reports also revealed that the Chinese central bank has finished the development of basic features of the DC/EP and is now focusing on drafting laws governing its circulation.
Suzhou is among the two cities – Suzhou and Shenzhen – that Chinese authorities chose to pilot the DC/EP.
Notably, the Agricultural Bank of China has already initiated a pilot of the project among some handful of whitelisted employees using its wallet.