Chinese Employees Pay Social Insurance Fees, Taxes with Digital Yuan – Is CBDC Adoption on the Rise?
A growing number of Chinese employees and firms can now use the nation’s Central Bank Digital Currency (CBDC) – the digital yuan – to pay their social insurance premiums and taxes.
Per reports from the Chinese media outlets JS China and NH News, citizens in Lianyungang and other cities in the digital yuan pilot zone can now use the People’s Bank of China (PBoC)’s digital yuan app to pay their social security and basic pension insurance fees.
Most Chinese employees are obliged to pay social security insurance fees, with the money being used to pay for healthcare and pension funds.
In the past, employees often needed to use third-party solutions to pay these fees. This was particularly true of flexible-time workers, the self-employed, and freelancers.
But JS China told the story of “Ms. Liu,” a flexible-time worker in Lianyungang. “A few days ago,” Liu became the first person in the city to pay their insurance fees using the CBDC.
The media outlet stated that Liu was shown how to complete the process in the service hall of the Lianyungang Branch of the Agricultural Bank of China, one of the PBoC’s biggest commercial banking partners.
Liu was quoted as stating:
“I am honored to be the first person to experience paying my social security fees using the digital yuan. All I had to do was open the app. It is very convenient and quick to operate, and it provides me with more payment options.”
CBDC Adoption: Chinese Employees – and Firms – Using Digital Yuan to Pay Bills
The payment system was co-created by the PBoC’s Lianyungang branch, the Lianyungang social security administrator, and the local Agricultural Bank of China branch.
Meanwhile, in Ninghai County, Ningbo, in Zhejiang Province, a local parts-making firm named Ningbo Tangtang Mold Base became the first business in the area to pay its taxes using the digital yuan.
The firm reportedly used the CBDC to settle a tax bill of around $350.
The company said the digital yuan “meets our diversified payment needs and makes tax payment more convenient.”
Earlier this month, Fujian Province claimed it had processed $22 billion worth of digital yuan transactions since joining the pilot just over a year ago.
