According to a report from ChinaQW, a defendant in the Intermediate People’s Court of Suzhou was ordered to pay a fine of 674 yuan of litigation fees in digital RMB. The court then notified the defendant that the fine could be paid using either cash or the central bank’s new digital currency.
Chinese media outlets are reporting this as a first for the digital yuan – with the central bank-issued token used to pay a court-issued fine for the first time.
The digital yuan has been in testing since late 2020 and is currently being trialed in select cities across China. The Chinese government has said that the digital currency will eventually be made available nationwide, though a timetable for this rollout has not been announced.
Per the article posted by ChinaQW, on April 19, Wei, the plaintiff in a motor vehicle traffic accident liability dispute case, had been handed a fine of just over 674 yuan by the People’s Court in the Lucheng District of Wenzhou, a city in Zhejiang Province.
But rather than pay the court by bank transfer, he instead decided to pay using the digital yuan, a transaction for which he “received a payment invoice” – and marking a legal first for the token.
While the digital yuan is yet to be made available on a wide scale, a number of pilot programs have been launched in recent months in cities including Shenzhen, Suzhou and Chengdu.
According to the report from ChinaQW, Mr. Wei was quoted telling the media outlet that the payment process was “very convenient,” and that he had “just had to click on the phone and it was done.”
For the parties involved, it appears that the use of digital renminbi to pay litigation fees has improved efficiency in the payment systems. The payment securely reaches the court’s bank account within minutes, and the relevant cases are automatically matched by payment reference.
This is not the first time the digital yuan has been used to pay for something. Last year, employees of state-owned enterprises in Suzhou were given red packets containing the digital currency as part of a government pilot program.
It is also not the first time China has experimented with using cryptocurrency in court cases. In February, a Shenzhen court accepted cryptocurrency as collateral in a business dispute.
This is a significant development, as it paves the way for the digital yuan to be used for other purposes such as paying taxes, utility bills, and even purchasing goods and services. While there are still some hurdles to overcome before the digital yuan can be fully adopted, this latest development bodes well for the future of crypto in China
The court added that this would help “improve the public’s litigation experience,” as well as boost “judicial credibility and public access” to the legal system.