A new pilot for the digital yuan, the central bank’s digital currency (CBDC), will be conducted in China’s Chongqing district .Taxpayers will be able to make payments in digital yuan as part of the test.
The digital yuan tax pilot is yet another asset experiment in the country, which is fast putting its CBDC to the test in many ways.
One corporation has already used the digital yuan to make tax payments, making it the first taxpayer to do so. A payment of 3,009 yuan was made by Dekor Decoration Materials using the ICBC digital wallet.
Chongqing is one of three regions that received approval for a greater experimental scope earlier this year. According to the Municipal Taxation Bureau, all taxpayers in the area are free to choose a pilot bank. They will be able to pay taxes in the digital yuan via online and mobile banking, as well as social security premiums and any non-taxable income collected by tax officials.
The digital yuan has been the subject of multiple pilots in recent years, all of which have received positive feedback from the country’s inhabitants. However, one official from the country’s central bank stated that the digital yuan has had a minor influence and that it may take a few years for the effect to be visible.
China has prioritised the development of CBDCs in its long-term agenda. The sheer number and scope of pilots demonstrates this. The country appears to be committed to enforcing the CBDC as widely as feasible.
Following an increase in COVID-19 instances, China recently declared that it will airdrop digital yuan tokens to support local economies damaged by lockdowns. More pilots will be conducted in the coming months, with an official launch possible in the medium term.
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