Communist China Expands Digital Currency Pilot Program

Communist China Expands Digital Currency Pilot Program (Source

The next world reserve currency might be a digital currency. As the United States national debt nears $27 trillion, the People’s Republic of China is testing out a digital yuan. This digital currency has no paper or coin equivalent. Users have to register their mobile phones and download an app to make deposits or transfer money. On April 20, the People’s Bank of China confirmed that it was testing a digital yuan in Shenzhen, Suzhou, Chengdu and Xiong’an. And after making some adjustments to the currency’s functionality, China’s Commerce Ministry announced on August 14 that it may soon expand this pilot program to include all major Chinese cities. According to the 21st Century Business Herald, employees at some of China’s state-run banks are already using digital currency to pay their bills. Like most of the world, Communist China relies on the U.S. dollar payment system to make international financial transactions. This makes the nation vulnerable to U.S. economic sanctions, like the sanctions the Trump administration has enacted against Chinese officials for suppressing pro-democracy movements in Hong Kong and sending Uyghurs to concentration camps. A major reason the Chinese Communist Party has been developing a digital currency since 2014 is to move away from the U.S. dollar and ultimately bypass international financial systems subject to U.S. laws. Central banks such as the U.S. Federal Reserve, the European Central Bank and the People’s Bank of China already issue digital money to commercial banks that have accounts with them. These commercial banks issue digital money to businesses, households and individuals; this is how debit cards enable people to make purchases without actually exchanging cash. But the type of digital yuan the People’s Bank of China is developing goes a step beyond this process. It will allow the People’s Bank of China to issue digital money directly to the public—bypassing commercial banks.

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