July 24, 2024

China's national digital currency will be centralized

China's national digital currency will be centralized

As you know, China intends to introduce a digital currency, with the help of which the government and the central bankwill be able to track the financial activity of citizens of the country.

Unlike cryptocurrency, whose anonymity allows users to make transactions without leaving a digital footprint, the electronic cash system in China will be tightly regulated.

The digital currency “will give the People's Bank of China a deeper understanding of transactions in the country”, – Analysts from Beijing-based research firm Trivium China note.

At the end of September, central bank governor Yi Gangsaid China's new currency could be interconnected with existing electronic payment systems such as popular mobile apps WeChat and AliPay. Despite the lack of a schedule, local media claim that the launch could take place as early as November 11 on Singles' Day.

Yee did not comment on the technical aspects of digital currency, but merely noted that its purpose was to replace cash:

“We will adhere to centralized management”

 

Just two years ago, three major Chinese crypto trading platforms – BTC China, OKCoin and Huobi – accounted for more than 98% of global trade, according to data from bitcoinity.org.

But the sector was unregulated, and transactions were not traceable to the authorities. In this regard, in 2017, Beijing introduced a ban on cryptocurrency trading activities.

In a country where social credit systems andface recognition cameras are the norm, the new Chinese cryptocurrency may allow the government to "more closely monitor the actions of its population." Thus, the digital currency will allow the People’s Bank of China to collect information that cannot be obtained with cash currency circulation.