In Shenzhen, for instance, the government gave away a total of 10 million yuan (about $1.5 million) to about 50,000 people, which they could then use with 3,000 local merchants after downloading a digital renminbi app. The digital currency has since been expanded to 10 cities and provinces covering 100 million people, where the pilot has been conducted in the form of lotteries. "By taking advantage of the dollar's global monopoly position in the financial sector, the US will pose an increasingly severe threat to China's further development."Ĭhina has been working on the digital yuan since 2014 and launched it as a pilot project in four Chinese cities last year. "China must brace for a full-blown escalation of the struggle with the United States and prepare to gradually decouple the Chinese yuan from the US dollar," Zhou Li, a former deputy director of the Communist Party's International Liaison Department wrote in July 2020. The real purpose of the new digital currency, however, seems to be to challenge the long-standing global reign of the US dollar. "It's easy for them to say that it's like Bitcoin when it's worlds apart." The ultimate goal of a cryptocurrency is the separation of money and state," said Stewart Mackenzie, a cryptocurrency expert based in Hong Kong. By design, the digital yuan will negate one of bitcoin's major draws: anonymity for the user." Unlike cryptocurrencies such as bitcoin, which are not issued by governments and therefore cannot be used as means of payment in most daily transactions, China's digital currency is issued and controlled by China's central bank.Īccording to the Wall Street Journal, the currency "is expected to give China's government vast new tools to monitor both its economy and its people. Already known as the country in the world with the most pervasive surveillance and social credit system, China has now created a digital currency, the digital renminbi or yuan - also known as Digital Currency Electronic Payment (DCEP) - to ensure that hardly any transaction goes unregistered. They are also treating the blockchain-based financial innovations that offer the best alternative to China's e-yuan like gatecrashers at their own exclusive party." - Niall Ferguson, historian, Bloomberg, April 4, 2021.Ĭommunist China is adding another element to its toolbox of surveilling and controlling its population.
"Not only are the American monetary authorities underestimating the threat posed to dollar dominance by China's pioneering combination of digital currency and electronic payments. The US, on its part, does not appear ready for China's challenge over the future of money. The digitalization, in turn, is part of China's ambition to become technologically independent of the West and to dominate global tech, and overtake the US as the world's dominant power by 2049," the 100 th anniversary of China's Communist Revolution.Ĭrucially, China's new digital currency, in addition to increasing state control and surveillance in uld affect the ability of the US, and other countries, to level sanctions at the Chinese government for its human rights abuses and other breaches of international law. The new digital currency is part of the CCP's ambition, as laid out in its new Five-Year Plan for the years 2021-2025, to digitalize China. to challenge the long-standing global reign of the US dollar. The real purpose of the new digital currency.
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