Starting in May, civil servants and public sector workers in the eastern Chinese city of Changshu will be paid exclusively in digital yuan, the biggest step towards the adoption of an electronic currency, reports The Register.

A document on the government’s website said the effort would help pilot the implementation of the digital yuan in Jiangsu province. According to the local newspaper Daily Economic News, one of the city’s hospitals has already informed its employees that their wages will be distributed through a personal wallet in digital yuan, which can be transferred using NFC and does not require an Internet connection.

Changshu already has a wide range of services that can be paid for with the digital yuan, including water and gas, cable TV, and public transport. Unlike cryptocurrency, which is banned by Beijing on the mainland, digital currency is backed by China’s central bank. The digital yuan got a boost when it was tested during the 2022 Olympics and has since been integrated into Alibaba’s Alipay payment platform.

The Chinese government wants a controlled electronic currency with blockchain records of how and where money is spent. However, the implementation of the digital yuan has not been as successful as expected, with only about $14.5 billion (100 billion yuan) passing through it between its launch and last August. In 2020, Alipay reportedly processed an average of $231 billion (1.6 trillion yuan) every month.

One of the major problems with the adoption of the digital yuan is the lack of places to spend it. Civil servant in Changshu told Reuters that as soon as they receive the electronic currency, they immediately convert it to traditional yuan because the nearest traders do not accept it. With all that, pilot programs continue to promote the use of digital currency in 17 provinces, hoping to achieve regional integration and regular use by 2025.