China's Central Bank Has Created Its Own Cryptocurrency

 

China's central bank, The People's Bank of China

And it begins. 

A state is about to enter the crypto game.

A new Chinese government version of a digital currency is to be launched and controlled by its central bank.

Notes The Wall Street Journal:

It is expected to give China’s government vast new tools to monitor both its economy and its people. By design, the digital yuan will negate one of bitcoin’s major draws: anonymity for the user.

And get this via The Journal:

Beijing is also positioning the digital yuan for international use and designing it to be untethered to the global financial system, where the U.S. dollar has been king since World War II. 

“In order to protect our currency sovereignty and legal currency status, we have to plan ahead,” said Mu Changchun, who is leading the project at the People’s Bank of China.

Here are some of the details:

The digital yuan resides in cyberspace, available on the owner’s mobile phone—or on a card for the less tech-savvy—and spending it doesn’t strictly require an online connection. It appears on a screen with a representation of Mao Zedong, looking just like the paper money.

In tests in recent months, more than 100,000 people in China have downloaded a mobile-phone app from the central bank enabling them to spend small government handouts of digital cash with merchants, including Chinese outlets of Starbucks and McDonald’s... 

China has indicated the digital yuan will circulate alongside bills and coins for some time. Bankers and other analysts say Beijing aims to digitize all of its money eventually...

The money itself is programmable. Beijing has tested expiration dates to encourage users to spend it quickly, for times when the economy needs a jump-start.

It should be obvious to all that digital money controlled by the state is an extremely dangerous totalitarian tool. If it ever becomes the only means of exchange in a country, not only will the state of that country be able to track all transactions but it also will be able to ban transactions it considers anti-society (that is, that it considers not in the best interest of the state). 

-RW