Last October, Xi Jinping stated that the development of blockchain technology is one of the priorities of the Chinese government. By that time, it was already known that in the territory of the Middle Kingdom, since 2014, a state cryptocurrency was being developed with the support of the People’s Bank of China, which established the Institute for the Study of Digital Currencies and several other research centers scattered throughout the country.
In the spring of 2020, clients of the Agricultural Bank of China “white list” were able to be the first to test the digital yuan behind closed doors. Around the same time, the director of Sino Global Capital, Matthew Graham, published screenshots of the preliminary version of the application interface for working with the first state cryptocurrency. It is known that the functionality of the application is largely similar to other Chinese payment services – Alipay and WeChat Pay.
According to Chinese media reports, the seven largest banks in China, Alibaba and Tencent corporations, as well as the Unionpay payment system will start using the crypto yuan very soon.
At first glance, all this looks very powerful, but what is hidden behind the introduction of cryptocurrency, which can become a springboard for the internationalization of the yuan?
The main disadvantage of the CryptoYuan is its centralization, because the currency will be issued on a blockchain controlled by the government. If many states track transactions through banks, then in the case of the crypto yuan, the authorities will be able to monitor every transaction made from any wallet. And this is not only information about what and when a person spends money, but also his location, interests, needs, the real state of health. Thus, the crypto yuan is much more than just a cryptocurrency. In fact, it is a whole system of total control.