After China’s central bank began a digital yuan pilot last year, it recently expanded the pilot to include larger cities such as Beijing and Shanghai. A report in the New York Times on Tuesday noted that the Chinese Communist Party‘s bold push for digital currency is different in nature from cash and digital deposits, and instead gives the government more financial control.
According to the Bank for International Settlements, more than 60 countries around the world have experimented with national digital currencies so far, but no major country has gone further than China.
The report quoted several Chinese government officials as saying that while authorities have not revealed when they will officially launch the digital yuan nationwide, they want to be ready for visitors to the 2022 Beijing Olympics to use the digital currency. And Prasad, former head of the International Monetary Fund’s China department, believes that one of the most important factors in China’s push for a digital yuan is the success of WeChat Pay and Alipay.
The report also notes that China’s digital currency will make it easier for the yuan to compete with the U.S. dollar as a global currency, while giving authorities more power to oversee the flow of funds. This raises concerns about citizen privacy, as the Communist Party has used many tools in the past to crack down on political dissidents.
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