China’s digital yuan office was too generous in pay rises, audit finds, but rapid expansion continues

The Digital Currency Research Institute gave employees an average pay bump of 28 per cent in 2020, eight times the typical ceiling for government departments

The central bank agency responsible for developing China’s digital currency went on a hiring spree in 2022 with salaries topping US$130,000 per year

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Pedestrians wearing protective masks walk past the People’s Bank of China building in Beijing on March 17, 2020. The central bank’s Digital Currency Research Institute was said to have offered pay rises of eight times the typical government limit in 2020. Photo: Bloomberg

Published: 9:30pm, 28 Jun 2023

China’s Digital Currency Research Institute, the central bank agency responsible for developing the digital yuan, was too generous in pay rises given to staff in 2020, coming in at eight times the typical ceiling for central government departments, according to an audit report published this week.

Workers at the department under the People’s Bank of China received an average salary bump of 27.93 per cent that year, the government’s National Audit Office said in its report. It offered a rare glimpse at the inner workings of the organisation that oversees the most widely used central bank digital currency (CBDC) of any major economy.

Seven years after it was established, the agency with the potential to shape the future of money in China offers little information about itself. It has no official website and offers no public data on its payroll size, budget or organisation chart. It was set up with the task of researching a digital currency that was first trialled in 2019 as the Digital Currency Electronic Payment, now widely referred to as e-CNY.

Since the 2020 pay hikes, the agency’s growth appears to have accelerated. Job postings show it kicked off a hiring spree last year. The hundreds of vacancies included positions for Beijing-based software engineers for Google’s Android mobile operating system, making up to 70,000 yuan (US$9,700) per month; cloud platform engineers in the eastern city of Suzhou, with a monthly salary of up to 60,000 yuan; and blockchain experts in Shenzhen, with a monthly salary of up to 80,000 yuan.

The institute is one of hundreds of government agencies named in the audit office’s report as having financial irregularities. The National Internet Finance Association of China – another agency under the central bank founded in 2016, which was set up to tame the country’s online finance firms – was found to have lost 4.65 million yuan on short-term investment products.

Trials of the e-CNY have rapidly expanded over the past four years, but there is still no timeline for an official launch. There are now 26 pilot cities and 5.6 million merchants using China’s CBDC, which is accessible through the official app and third-party payment systems like Alipay and WeChat Pay. By the end of last year, 13.61 billion yuan of e-CNY had been spent across a variety of contexts.

In major cities including Beijing, Shanghai and Chengdu, capital of southwestern Sichuan province, subway riders can use e-CNY as a payment option on local transport apps. As of this month, passengers in eastern Zhejiang province are able to use the official e-CNY wallet app to pay for the metro without an internet connection.