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![](https://gimg2.gateimg.com/blog/1679447253155655279redian.jpeg)
## [TL; DR]
The Chinese city of Changshu will start paying its employees using the digital yuan. 

Thee-CNY holders will be able to buy various services using this Chinese currency.

As a result of the crypto regulation in the country, the e-CNY is the only legal digital currency in China.

Several commercial banks provide crypto services to the people in Mainland China.  

## Introduction 
China, one of the leading countries in the adoption of blockchain technology, is taking a further step in using its central bank digital currency ([CBDC](https://www.gate.io/learn/articles/what-are-central-bank-digital-currencies/363 "CBDC")). In its bid to make Yuan a dominant international currency, it is expanding the use of the e-Yuan in Mainland China, hoping that other countries will adopt it. Today, we look at how the City of Changshu will pay its workers using the e-yuan and possible challenges that may arise.

## Changshu to pay its workers using e-yuan
The City of Changshu will start paying its workers using e-yuan starting in May 2023, a move that is likely to increase its demand. By the way, e-yuan, also called e-CNY, is China’s central bank digital currency established in 2021.It is the way in which the central bank digitizes its notes and coins to reduce dependence on physical cash.

![](https://gimg2.gateimg.com/image/article/16837756541981683775613_.pic_hd.jpg)
Changshu City - Hrs.com  

The e-CNY is different from the other forms of electronic cash in that it exists on the distributed public ledger, also known as the blockchain. This means that every transaction involving e-CNY is tracked on the blockchain. However, the e-yuan is not a decentralized digital coin since it is created, backed and managed by the central bank. 

It is also important to note that several banks such as China Merchants Bank, Industrial Bank, WeBank, and Mybank support the digital yuan and enable people to convert it into notes and coins. In fact, these banks operate the Yuan App. 

Already, the Chinese economy relies on advanced cashless payment systems. Therefore, the eYuan is a legal tender in the country despite the low adoption. As such, China is using Changshu as a pilot project to gauge how far the citizens will accept e-CNY as a means of payment. 

As said, the civil servants in Changshu, a city with over 1.5 million, will get their May wages and salaries using e-CNY. This also becomes the biggest roll out of the digital yuan. Therefore, all state employees who include workers of state-owned enterprises, schools, hospitals, media organizations and research institutes will receive their salaries in e-CNY. 

However, Changshu has been using e-CNY to make payments for several services. For example, it has been using it to pay for subsidies for government employees. In addition, the city has been paying for gas, water, cable TV and public transport using e-CNY. 

## Requirement for workers to be paid in e-CNY
The key requirement for the workers to get paid in e-CNY is to have digital wallets which the People’s Bank of China released in January 2022. Good enough, these people can get the wallet app on Apple and Android stores. This digital wallet was used during the 2022 Olympics and is integrated on Alibaba's payment platform and Alipay. 

Once the users have the wallet apps they can sign up using various commercial banks which include ICBC, China Construction Bank, Bank of Communications, Agricultural Bank of China, Bank of China, Postal Savings Bank of China and China Merchants Bank. They can also use two online banks namely WeBank (WeChat Pay) and MyBank (Alipay). 

## How can people use Chinese crypto?
There are several ways in which the workers can use the Chinese currency (e-CNY) in the country.  The users can purchase various goods and services using the digital currency in China. 

The digital Yuan is integrated into Alipay and Wechat Pay, which are the main payment platforms in the country. With that they can make payments using more than 105 mobile applications for online shopping and gasoline, for example.  Insurance policies, apartment rentals and education are examples of services which people can pay for using e-CNY. 

Read also: [WeChat Bans Accounts Involved in Crypto and NFT as China tightens up on Crypto](https://www.gate.io/blog_detail/1230/wechat-bans-accounts-involved-in-crypto-and-nft-as-china-tightens-up-on-crypto "WeChat Bans Accounts Involved in Crypto and NFT as China tightens up on Crypto")

The Chinese crypto users can also purchase securities using the e-CNY at various platforms like Soochow Securities mobile app. In addition, they can convert e-CNY to notes and coins at various commercial banks around the country. 

![](https://gimg2.gateimg.com/image/article/16837757351991683775629_.pic.jpg)
Yuan App - Nairametrics

## The government’s effort to promote the pilot of digital renminbi in Jiangsu province
As we have noted, the government through The People’s Bank of China has given permission to several commercial banks to offer crypto related services. For instance, six-state owned commercial banks which include Bank of China and Postal Savings Bank of China provide such services. 

Secondly, the Central bank does not charge any fees to banks and other operating institutions for the conversion of e-CNY to cash. In return, the banks and other institutions do not charge any fees to their customers that convert e-yuan to cash. 

The government has been persuading various merchants and other institutions to accept e-CNY. Also, by 2025 the digital yuan will be used for government procurement, tax payments and social security, among others. 

Read also: [Dollar is falling: Dollar May Lose Strength as China and Russia Move to New Currency Bloc](https://www.gate.io/blog_detail/2475/dollar-fall-china-russia-new-currency "Dollar is falling: Dollar May Lose Strength as China and Russia Move to New Currency Bloc")

## Problems with e-yuan adoption in China
One problem is the lack of places where the people can use e-CNY to buy goods and services. In some areas, there are no local merchants that accept the digital currency. As a result, the e-CNY holders are forced to convert it to cash. 

Similarly, many consumers in the country prefer to use digital payment platforms like WeChat Pay and Alipay to settle transactions. The main reason is that they are familiar and comfortable with such payment systems. 

The success of e-CNY depends on collaboration between the government and other players such as payment platforms. Alipay and WeChat Pay are examples of such players. Without their active participation there will be slow crypto adoption.  

Read also: [China to launch a national blockchain Center: Development of Blockchain Tech in China](https://www.gate.io/blog_detail/2298/china-to-launch-a-national-blockchain-center-development-of-blockchain-tech-in-china "China to launch a national blockchain Center: Development of Blockchain Tech in China")

## Conclusion 
Starting in May, the Chinese city of Changshu will pay its employees in Chinese digital currency, e-CNY. This digital currency is different from other cryptocurrencies since China’s central bank backs it. The main problem with the adoption of e-CNY is that some local merchants do not accept it which limits its utility.

## FAQs
### Is crypto banned in China?
Mainland China has banned cryptocurrency and related activities. However, it promotes the use of blockchain technology. Also, it has its own central bank digital currency called e-yuan (e-CNY).

### What is China's digital yuan?
China digital yuan is the country's central bank digital currency (CBDC) that its citizens can use interchangeably with its notes and coins. A person should have a digital yuan wallet to use the digital yuan.

### How can I buy the Yuan?
Only the people who live in China can purchase the digital yuan through various commercial banks like ICBC, China Construction Bank, Bank of Communications, Agricultural Bank of China, Bank of China, Postal Savings Bank of China and China Merchants Bank. However, you need a Yuan app to receive and manage the digital Yuan (e-CNY).



<div class="blog-details-info">
<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>


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In a pilot programme to test the adoption of digital yuan, the Chinese city of Changshu will pay its workers using e-CNY. However to receive the payment the employees should have the Yuan app.

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Chinese City of Changshu will be Paying Salaries in E-Yuan