Recently, China took a major step in its central bank digital currency (CBDC) tests by debuting blockchain-enabled salary payments with digital yuan at Xiong’an, according to media reports. The People’s Bank of China announced on its website that it successfully integrated the country’s first ‘on-chain wage payouts’ in digital yuan.
The new CBDC pilot uses a blockchain-based payment system that is used to pay wages to workers on spring afforestation projects in Xiong’an. A team of engineering subcontractors made the payments directly to builders’ digital wallets from a public wallet and registered all the relevant data on the blockchain. The announcement also mentioned that the blockchain-based payment simplified the salary payment process a lot and its implementation marks the first combination of blockchain technology with the digital yuan.
Announcing the news last week, Xiong’an authorities said that the debut was launched under the guidance and support from the Shijiazhuang-based PBoC branch, the Bank of China Hebei Xiong’an branch, and the National Development and Reform Commission.
According to experts, China is fairly far along when it comes to the testing of the digital yuan and has done these tests in several regions in the past year, along with setting up a legal framework for the CBDC with the help of various global finance regulators.
Xiong’an is one of the first four regions that debuted China’s CBDC. The Xiong’an branch of the Agricultural Bank of China in Hebei launched its first digital yuan-based hardware wallet which was developed by the Party Working Committee of the Xiong’an New Area and the PBoC’s branch in Shijiazhuang in February 2021.