Residents of three Chinese metropolitan areas having to pay taxes and expenses with digital yuan

Residents in three major Chinese metropolitan areas have started having to pay tax, stamp duty and social security premiums while using country’s central bank digital currency (CBDC) — digital yuan (e-CNY). 

According to some domestic news report, numerous government departments within the Zhejiang province — located just south of Shanghai — are presently running real-world trials programs which involve citizens while using digital yuan to pay for taxes.

The Zhejiang Taxation Bureau is dealing with the country’s central bank — the People’s Bank of China (PBoC) — to understand more about a number of taxation payment methods while using digital yuan.

The PBoC and affiliated municipality agencies are apparently searching to another major test for that digital yuan, the Asian Games that will occur in Hangzhou in September. Local government bodies declare that digital yuan could be employed to streamline calculating tax-related activities.

Following a effective stages in the implementation from the digital RMB pilot program, which started public testing in April 2021, the PBoC mentioned that it’ll turn to extend this program to more Chinese metropolitan areas including Guangzhou, Tianjin and Chongqing.

On the other hand from the ledger to taxation, one municipality has selected to “airdrop” 15 million digital yuan, or around $2.25 million during the time of writing, to the residents wishing to improve consumer spending throughout the pandemic and promote using the brand new currency.

Related: Hong Kong watchdog warns stablecoins could undermine HKD in CBDC paper

Roughly 130,000 residents from the Futian district in Shenzhen will get a share from the 15 million digital yuan (e-CNY) by means of a red envelope through the Chinese social networking application, WeChat. Digital RMB airdrop marks the newest government make an effort to boost spending in regions of China most impacted by the current COVID-19-related lockdowns.

In Chinese along with other East Asian cultures, financial gifts are frequently passed out in red packets or envelopes, because the colored wrapping bestows good wishes and luck upon the recipient.

These developments extend China’s already significant lead in creating a central bank digital currency for public use, with nearly all countries still within the research stages of CBDC implementation.

Based on condition media, transactions in digital yuan across China found nearly 87.6 billion yuan through the close of 2021.

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