Chinese companies have embraced the use of the digital yuan to contribute to their employees’ housing funds, as the country’s banks explore new applications for central bank digital currencies (CBDCs). The Guangzhou Housing Provident Fund Management Center, through the Guangzhou Daily, announced the launch of digital yuan remittance services. Under the housing provident fund policy, employers are required to make contributions to funds that enable their employees to cover accommodation expenses, such as buying, renovating, or repairing houses.
This innovative approach allows companies in Guangzhou to utilize the digital yuan instead of traditional bank transfers when making fund payments. Local businesses can now set up digital yuan payments through online portals provided by the city government. In addition, service areas dedicated to digital yuan-paying companies have been established within government buildings.
Partnership with ICBC
This initiative is a joint effort with the Industrial and Commercial Bank of China (ICBC), a major state-run bank and a significant player in digital yuan pilots. Once the setup process is complete, companies can conveniently make direct debit-type payments from their corporate wallets to the funds’ digital yuan wallets. Officials from the city government highlighted that this process is faster than conventional bank transfers, as CBDC payments are instantaneous, whereas traditional transfers can take up to two or three days to process.
According to a real estate agency owner named Huang, who has already utilized this service, “CBDC payments provide a more efficient and convenient option for business owners, ensuring quick contributions to their employees’ funds.”
Expanding Digital Yuan Initiatives
Beyond Guangzhou, other financial institutions are also venturing into digital yuan business opportunities. The Bank of Beijing, a commercial bank based in the Chinese capital, has partnered with local government organizations in the Shijingshan District to issue innovative incentive loans for small and medium-sized enterprises (SMEs) using the digital yuan. This marks the first of its kind in China, supporting the growth and development of SMEs.
Additionally, the world’s largest small commodities market in Yiwu has officially integrated with the digital yuan network. This move allows traders and businesses in the market to conduct transactions using the digital currency. Furthermore, in Shenzhen’s Yantian District, newly married couples receive digital yuan tokens and vouchers worth up to $715, providing them with financial support as they embark on their new chapter of life.
