The adoption of China’s central bank digital currency (CBDC), the digital yuan, is gaining significant traction, with more Chinese citizens and firms utilizing it for tax payments and transactions. The Hunan Province’s Tax Bureau and the Changsha Central branch of the People’s Bank of China (PBoC) have reported a surge in the use of the digital yuan for payments to state organs, taxes, and government-owned banks.
Increased Digital Yuan Adoption for Tax Payments:
From January to June 2023, individuals and companies based in Hunan Province successfully employed the digital yuan to pay a total of $51.3 million in taxes, comprising 794 transactions. The majority of these transactions, 754 in total, were facilitated through a CBDC tax payment platform operated by the Postal Savings Bank’s Hunan Branch.
Collaboration with Postal Savings Bank:
The Postal Savings Bank, predominantly owned by the state-run China Post (69%), has played a pivotal role in the adoption of the digital yuan. It processed nearly 99.58% of the total digital yuan tax payments in the province. The bank has actively collaborated with the PBoC in the development and rollout of the digital yuan, even creating an “offline” digital yuan wallet solution.
Expanding Use Cases:
The Postal Savings Bank’s Hunan Branch has extended the utility of the digital yuan by enabling companies and individuals to pay a comprehensive range of state levies using the CBDC. Additionally, the bank offers digital yuan tax refund services, allowing tax offices to utilize the CBDC for reimbursements.
Promoting Adoption and Enhancing User Experience:
The bank is committed to optimizing the digital yuan payment experience for its clients and actively supporting the ongoing digital yuan pilot. This effort aligns with the PBoC’s push to foster the wider use of the digital yuan across various aspects of the economy.
Wider Acceptance and Uptake:
Changsha, one of the largest cities in Hunan Province, has witnessed a surge in CBDC adoption. Authorities in the city reported that over 420,000 merchants are now accepting payments in the digital yuan. Moreover, the uptake of digital yuan promotional giveaways has been overwhelming, with usage rates for e-CNY promotional discount coupons exceeding 90%, and in some regions, even reaching 99%.
As China continues to drive the adoption of its digital yuan, its use cases expand, and more citizens and businesses engage with the CBDC for various financial activities, ranging from tax payments to daily transactions.