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Chinese firms can now use the digital yuan to pay into employee housing funds, as the nation’s banks look for new CBDC applications.
Per the Guangzhou Daily (via the Guangzhou government’s website), the Guangzhou Housing Provident Fund Management Center has “launched digital yuan remittance services.”
In China, housing provident fund policy requires employers to pay into funds that allow company workers to pay for accommodation.
The funds provide financing for employees to buy, construct, renovate, or repair houses.
The innovation allows companies in the city to use the CBDC – rather than conventional bank transfers – to make fund payments.
The city government explained that local companies can use online portals to set up digital yuan payments.
It has also created service areas for digital yuan-paying firms in government buildings.
A construction site in Guangzhou, China. (Source: Tim Wu [CC BY 4-0])
China’s Big Bank CBDC Involvement Deepens
The initiative has been co-launched by the Industrial and Commercial Bank of China (ICBC).
The ICBC is one of the biggest state-run banks in the country and is a key digital yuan pilot player.
After an initial setup process, firms can choose to make direct debit-type payments to funds digital yuan wallets from their corporate wallets.
The city claimed that the process was faster and more convenient than using conventional bank transfers
CBDC payments are instantaneous, whereas traditional bank transfers can take “up to two or three days” to process, city officials explained.
A real estate agency owner surnamed Huang told the media outlet they had used the digital yuan to pay into a fund for 10 employees. Huang said:
“The whole process of depositing into funds with the digital [yuan] is speedy. It is a much faster way to send funds. They arrive in real-time.”
China’s Digital Yuan Progressing?
Business owners in Beijing receive digital yuan loans at a ceremony held in the capital. (Source: yangli20067/Weibo/Screenshot)
Elsewhere, the Bank of Beijing, a commercial bank based in the Chinese capital, is also pursuing digital yuan business.
The bank has teamed up with local government organizations in the city’s Shijingshan District to issue digital yuan loans for the district’s SMEs.
The bank said these were China’s first “innovative incentive loans” for small and medium-sized enterprises.
Last month, the world’s biggest small commodities market – in China’s Yiwu – officially linked to the digital yuan network.
Meanwhile, in Shenzhen’s Yantian District, newly married couples are being awarded up to $715 worth of digital yuan tokens and vouchers.
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