Public sector employees in the Chinese city of Changshu will start receiving their salaries in central bank digital currency (CBDC), as China’s rollout of the financial technology continues apace. The notice came from the city’s financial authorities, according to a local media report, and the shift will be effective starting in May.

As of last month, China’s CBDC rollout has expanded to 26 different regions in 17 of 23 provinces, the report states. Another report noted that Changshu City has previously promoted the digital yuan’s use in certain situations, such as paying for public transport, medical expenses, groceries, and utilities like gas and water.

So far, the only major economy that has already launched a CBDC is China, which unveiled trials of the e-CNY at the end of 2021. But others aren’t far behind. A 2021 survey by The Bank for International Settlements found that 86% of central banks were “actively researching the potential” of CBDCs.

CBDCs resemble stablecoins because they are digital tokens pegged to the price of Chinese yuan. The e-CNY aims to be retail “digital cash” and it is fully backed by the People’s Bank of China (PBoC). Instead of being issued by commercial entities on decentralized networks, CBDCs are issued and controlled by a country’s government or central bank.

With the introduction of CBDC, the currently existing form of money issuance as well as accountancy will undergo a significant qualitative change: the central bank will not only be able to issue or redeem digital central bank money upon a keystroke, but it will also be able to keep track of any transaction conducted subsequently. Any payment from one party to another can be logged on a digital ledger. Should CBDC entirely replace cash, any transaction will be traceable, and any cash could be become programmable.

A balanced view of the pros and cons of CBDC will be discussed in the e-Brochure: China’s Digital Yuan Setting The Standard For Central Bank Digital Currency (CBDC).