The year 2022 is expected to see the official launch of the digital yuan. After having banned most private cryptocurrency activities, could China consider this state cryptocurrency as a means of increased control over its populations?
When Satoshi Nakamoto, follower of willingly utopian crypto forums, launched the idea ofand some , he probably never envisioned that his creation could one day be hijacked for popular control. Yet this is what could happen in the land of China …
The first experiments on the digital yuan started in April 2020. It is an official currency issued by the Central Bank and therefore what is called an MDBC – central bank digital currency. And to believe , an official launch is expected at the end of 2022, for d’ in Beijing.
How the CCP Stopped Private Cryptocurrency Activities
The launch of this MDBC takes place in a very specific context. Last spring, the ruling Chinese Communist Party (CCP) banned cryptocurrency mining as well as. The consequence was not long in being felt: formerly 4e world country in of cryptocurrency trading, China has fallen to 13e place, always according to Chainalysis. The second Asian country in the ranking, Hong Kong, is at 39e place, followed by South Korea (40e) and Japan (82e).
These measures taken by the CCP have impacted many commercial structures based in China, which have not been able to fill their reserves withas they did before. From exchanges (marketplace) such as Binance, Huobi or FTX were strongly impacted. What’s more, the government of China has launched several campaigns aimed at discouraging the public from using cryptocurrencies, including in national media.
The first tests of state crypto
The first tests of the digital yuan started in April 2021, in partnership with several state banks, but also on very popular apps such as WeChatPay or AliPay. In July 2021, more than 20 million wallets (wallets) of digital yuan had already been created, giving rise to transactions of the equivalent of 5 million euros.
Without a doubt, the CCP sees this digital yuan as an instrument capable of increasing rivalry with the dollar. What’s more, the availability of all transactions on a single blockchain is able to help banks better track cash flows. But the consequences do not end there.
A blockchain to rule them all?
Since the advent of smart contracts, l’became programmable. And some market analysts interviewed by Chainalysis want to see some unexpected consequences to say the least. ” If the government wants to modulate the stock market at some point, just write a few lines of code for this purpose. Primitive Ventures’ Dovey Wan points out.
This is not all. An MDBC could turn into a tool for financial monitoring of individuals. ” There has never been a centralized tool allowing a government to access the financial transactions of all citizens. », Remarks Yaya Fanusie of New American Security.
The CCP has already made it known that the digital yuan blockchain should help trace corruption at the government level. But how can we fail to see its use within the rating system for individuals that has been in place for several years. Could a violation lead to exclusion from the financial system? If the blockchain thus becomes a tool for monitoring populations, part of the libertarian dream of the first supporters of cryptocurrency could find itself seriously abused.