Chinese citizens have begun using the digital yuan to pay “inter-city” tax bills – doing away with the need to conduct wire transfers to local tax authorities via banks.
Per the China Securities Network and the People’s Daily, the first person to use the digital CNY in such a manner was a man surnamed Qi – the owner of a small private decoration company in Guangzhou.
Qi was commissioned to carry out a project in the Dinghu District of Zhaoqing, where he received payment and was thus legally obliged to submit a declaration to the local tax body and pay levies on his earnings.
But rather than taking the conventional route and transferring fiat to the Zhaoqing tax authority, he decided to take the initiative and pay using the nation’s central bank digital currency (CBDC) instead.
The People’s Daily wrote that “as a young man who pays attention to current trend,” Qi was “willing to try new things” – and had “a positive experience” with the digital CNY, simply transferring tokens from his own wallet to the Zhaoqing tax authority’s wallet.
He was quoted as stating:
“The digital yuan has become very popular recently. I really hadn’t expected that I could use it to pay taxes in different locations. And there were no handling or transaction fees to pay!”
Guangzhou was brought into the digital CNY pilot in April.
Various government bodies appear to have been actively encouraging citizens to pay taxes using the CBDC, claiming that the token helps boost efficiency, is easy to store, and promotes transparency.
As reported at the end of April, a number of government organs in Zhejiang province were trialing solutions that involve “the online transfer of digital yuan” to pay taxes, with the cities of Hangzhou, Shaoxing, and Jinhua launching digital CNY tax payment solutions.
In Shanghai, as the China Securities Network reported, local authorities have also executed another first for the CBDC, handing out a USD 445,000 “enterprise talent” subsidy to an unnamed party in the city.
And elsewhere, the People’s Daily reported that a USD 445,000 digital yuan loan had been issued to a company involved in cross-border trade. The firm, which appears to be involved in the e-commerce sector, secured the loan from a branch of the China Construction Bank, and it will use a portion of the tokens to pay for freight train transport costs to Europe.
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Learn more:
– Digital Yuan Now Being Used to Pay Taxes in Chinese Pilot Zones
– Chinese Central Bank May Apply Smart Contract Technology to Digital Yuan
– Chinese Banks Launch Automatic Digital Yuan-to-Fiat Conversion Tools
– Chinese Man Uses Digital Yuan to Pay Court-issued Fine in Legal First
– Chinese Digital Yuan Spending on the Rise Despite COVID-19-induced Slump
– Alipay Provides Digital Yuan Boost as COVID-19 Deals PBoC Blow
