Chinese Digital Currency Stocks Enjoy Surge As Digital Currencies Witness Heavy Promotions

Chinese digital currency-related equities rose on Monday, despite a sluggish broader market, as a result of the recent steps taken by China to promote the usage of its own central bank digital currency (CBDC), the digital yuan.

Changshu, a subordinate city of Suzhou in eastern Jiangsu province, will begin paying civil officials and other state sector personnel in digital yuan in May, according to state broadcaster Securities Times on Sunday.

"This is the latest trial China is conducting to promote its e-CNY," Dan Wang, chief economist at Hang Seng Bank China, said of the digital yuan.

Although adoption is still in its early stages, China has been a leader among countries producing CBDC - digital tokens issued by central banks.

Global Infotech Co shares were up 13% by midday, Chutian Dragon Co was up 8%, and Newland Digital Technology Co and Northking Information Technology Co were also up.

In contrast, the benchmark index fell 0.4% due to ongoing fears over China's economic recovery.

"Using e-CNY to pay salaries will help popularise the digital currency," said Wang Pengbo, senior financial analyst at consultancy BoTong Analysys.

A student at a public school in Changshu stated that she has been getting e-CNY transit subsidies since October. Two more state-sector employees in various sections of Suzhou stated that they have been receiving e-CNY as pay since last year.

However, all three individuals stated that they do not have suitable scenarios in which to spend their digital yuan.

"Once I get my salary in e-CNY, I always convert it to traditional yuan," said Yang, a doctor at a Suzhou hospital.

"I don't know how to use it, to be honest, no merchant around me receives digital yuan," Yang said, only using her surname because she is not licenced to speak to the media.