China’s e-yuan – the Financial Times takes a look at how the Chinese Government is pushing adoption of the natively-digital currency, not just to advance payments and investments, but also to exert even greater control over its population: “Virtual control: the agenda behind China’s new digital currency”
(Article on Financial Times; may be paywalled; consider supporting good journalism)
China is intent on becoming the first large economy to introduce a digital currency, showcasing its position as the global leader in payments technology to the world at next year’s Winter Olympics.
Cryptocurrencies are often decentralised; they are not issued or backed by governments. The “e-yuan”, by contrast, is part of China’s top-down design… the digital currency project is tied up in the Communist party’s drive to maintain control over society and the economy. The technology is partly designed to reinforce its surveillance state.
Its digital format enables the central bank to track all transactions at the individual level in real time. “we will give those people who demand it [paper money and coins] anonymity in their transactions… but at the same time, we will keep the balance between the ‘controllable anonymity’ and anti-money laundering, CTF [counter-terrorist financing], and also tax issues, online gambling and any electronic criminal activities”
If current statements by the government are any measure, it’s a pretty big blow to privacy. The e-yuan is also seen
as a means to reassert state control over its fintech industry and a vast e-payments market that is dominated by two huge private companies, Ant Group and Tencent… the digital renminbi is distributed directly to the e-wallets of users by state-owned banks, thus setting up payments channels that circumvent Alipay and WeChat Pay.