Key questions answered
With the news that China is looking into developing its own digital currency, possibly entitled Digital Currency Electronic Payment (DCEP), the head of the People’s Bank of China digital currency research institute, Mu Changchun, answered key questions in Singapore earlier this week.
At a conference, he suggested that a new type of currency could offer ‘controllable anonymity’.
China will become the first country to launch its own cryptocurrency
While it would never be as anonymous as cash and coins, the government is pursuing its development in the hope that it will help to tackle money-laundering, tax evasion, and terrorist financing, alongside online gambling.
When DCEP is eventually launched, China will become the first country to launch its own cryptocurrency.
Growth in illegal gambling
Further information is still needed, but it would appear that a user would have to succumb to some financial and regulatory checks to bank digitally . This data would then be held by the government, which would make it relatively easy to see where it was being spent, and by who.
While the new currency would also exist alongside typical cash and coins, there is no guarantee that it will not replace the Yen in the future. However, with little appetite for gambling in China, this is sure to be a big issue. At the moment, only participation in the state-controlled lottery is allowed.
Boosting rural inclusion
The government has praised the creation of DCEP in boosting financial inclusion in rural areas where there might not be access to banking facilities. Officials have also claimed that it will protect the country from money laundering and terrorism.
However, critics have said that this is just another way for China to censor its people. The government has already blacklisted sites that offer gambling, imposed curfews, and taken on internet giants in their hopes to win the battle of the web.
Start date unknown
Already five years in the making, it is still unknown when the currency will be ready, although Changchun stressed that seeking full control of the information of the general public is not its purpose. He said:
That is a balance that we have to keep, and that is our goal.”
He concluded his talk by saying that the currency was ‘almost ready’ and that it would be distributed by the People’s Bank of China to other commercial banks and applications, including AliPay and WeChat Pay.
