The thought process behind creating Central Bank Digital Currencies is now rapidly being brought to life. Although most countries are still in the testing phase, it is only a matter of time till we witness a massive rollout of the CBDCs. In another win for the digital currency, three cities across China have now adopted the digital yuan for payments. According to several news sources in the country, the residents are leveraging digital currency to pay taxes and offset some other bills.
China will test the digital yuan at Asian Games
The reports also mentioned that the government of Zhejiang province gave the go-ahead for these tests. The real-world test will see users pay taxes and other bills across the province. The taxation agency of the province is already coordinating with the Peoples Bank of China to drum out a good way to offset tax bills using the digital yuan.
Outside that, the PBoC is also in talks with several countries on the next strategy to adopt in resting the digital yuan. Notably, the government has plans to test it at the upcoming Asian Games, which is coming up later this year. Authorities in local regions also believe that residents could also use the digital yuan to help them calculate their taxes in several activities.
After the success that the pilot program of the CBDC recorded last year, the PBoC mentioned that the testing would cut across other cities. Some of the cities mentioned in the statement were Guangzhou and Chongqing. Aside from the taxation moves, the government of one of the local provinces has announced an airdrop that will see digital yuan worth $2.2 million shared across citizens.
The thought process behind the airdrop is to help people recover from the pandemic and increase the use of the digital currency in the region. Also, more than 130,000 citizens living in the Futuna district will be beneficiaries of more than 15 million digital yuan that will be disbursed in a red envelope. Any resident who intends to get a piece of the CBDC would need to download the WeChat app to win a fraction of it.
This airdrop is the latest one that the government has embarked upon with a move to increase the net spending in areas involved in the lockdown. Chinese culture depicts that money offers should be sent in red envelopes because it sends a message of good luck to the recipient. This recent update has shown why China is still in the testing phase, putting its heads and shoulders above everyone in the race to roll out a CBDC for the public. In the news by local authorities, the total transactions carried out with the digital yuan at the close of last year was around 87.6 billion yuan.