After Sweden, it’s China’s turn to experiment with its own digital currency. Information confirmed on Monday April 20 in the Wall Street Journal by the Digital Currency Research Institute of the People’s Bank of China after multiple articles in Chinese government media this weekend.
A general deployment for the 2022 Olympic Games?
The global race for digital currency is underway, encouraged even by the world economic forum. China has had a research program in this direction since 2014, however, it was the announcement of the cryptocurrency, Libra, which prompted the People’s Bank of China to accelerate its research.
Four cities will test the currency now known by the simple acronym “DC / EP” (for digital currency, electronic payment). Shenzhen, near Hong Kong, where Huawei’s headquarters and the country’s third largest stock exchange are located, Chengdu, one of the major technological metropolises of Inner China, Xiong’an, a satellite city of Beijing and Suzhou.
The pilot program should be used to improve the functionality of the currency. It is a test balloon for a generalized deployment at the edge of the Winter Olympics 2022. To limit the risks of inflation, the diffusion of the currency will be local, in measured quantity, over a period well demarcated.
Digital currency does not promise the anonymity
The goal of digital currency is to replace, in time, part of the currency, in particular the currency in circulation. For the Chinese central bank, this government-managed currency will help fight money laundering, terrorist financing, and games of chance.
Digital currency is not a cryptocurrency like Bitcoin is or Libra could be. The Chinese government certainly promises privacy, but the operation of the currency will not be anonymized in such a deep way, enough to distrust the promises of the Chinese government rather known until now to monitor its population closely.