The People’s Bank of China will make the payment through a digital wallet next May.
Public employees in Suzhou City, China, will receive their first payment in digital currency next May. It is about an asset that the People’s Bank of China will issue. Asian government employees will be the first ones to receive DCEP, which is China’s first National Digital Currency. That name means Digital Currency Electronic Payment.
The news was revealed in a first instance by an official document clarifying that, since May, employees of the municipal government of Suzhou will receive a payment in this digital currency.
As local media indicated, the payment corresponds to 50% of the subsidies that the Chinese government grants to its employees to pay for transportation and other benefits.
It is worth noting that this digital currency will have the necessary support for its operation. Almost four state banks of China will issue this digital asset. These financial institutions are the Industrial and Commercial Bank of China (ICBC), the People’s Bank of China (PBOC), the Agricultural Bank of China (ABC), and the China Construction Bank (CCB).
Considering this movement as a government action, the China Star Market document orders all government institutions and organizations to sign DCEP issuance contracts directly with banks. This operation will serve to prepare these government institutions and organizations for the launch of the digital currency next May.
In this sense, the government urged its citizens to prepare for this new change. The institution advised public employees to download and install the digital wallets that would serve to deposit the digital asset. Likewise, the statement reminded that each banking institution will have its app that will be in charge of managing these subsidy funds.
A few days ago, the Agricultural Bank of China was testing a digital application that would serve as a crypto wallet. This tool would only serve a certain group of users who were considered part of a white list. This list allowed only its members to register their accounts for the digital wallet application.
On the other hand, the PBOC would have started, since December 2019, a group of pilot tests that would be in charge of managing digital accounts with DCEP. The institution reported that such tests were being conducted in some cities, such as Suzhou and Shenzhen.
It should be mentioned that, despite the recent viral outbreak of Covid-19, considered by the World Health Organization (WHO) as a Pandemic, the situation has not delayed processes. The People’s Bank of China mentioned that this type of work is “progressing smoothly”.
In this sense, some experts highlight that, even in these circumstances, these jobs must be prioritized. These jobs not only represent a significant advance in negotiations and financial procedures but could also be useful to combat Covid-19.
Some reports indicate that when China declared a health emergency, due to the Covid-19 outbreak, the country implemented a protocol for collecting cash, which may have been in high-risk areas.
This measure could help prevent the spread of the virus. In this way, developing digital financial alternatives can become a top priority for the Chinese government, especially during the pandemic.
By María Rodríguez