In a bid to outdo Western developed countries, China is developing a new form of government currency that some financial experts believe can serve as an economic threat to the United States and its Western allies. There are about 80 countries in the race of developing what's called a Central Bank Digital Currency or CBDC, a regulated yet digital type of money.
According to CNBC, China launched its very own digital currency called the Yuan, like its current currency, to more than one million Chinese citizens, leading the race to a cashless future. The U.S. in the meantime is still "largely focused on research."
This research is being carried out by MIT's Digital Currency Initiative and the Federal Reserve Bank of Boston, which are, in layman's terms, figuring out what a digital currency might be like for the United States, where privacy is the ultimate concern of Americans. In observing China's road to cashless society, the U.S. is in fact learning a few things.
Take Erik Bethel, former World Bank executive director for the U.S., who explained to CBN News that China's digital currency, the Yuan, are in fact "not cryptocurrencies, they are not so-called stable coins, in effect, they are the national physical currency of a country just represented in a digital form."
Bethel argued that while the entire world's attention has been captured by something shiny and new like the Bitcoin, China is quietly developing a digital version of its own currency called the Yuan or Renminbi, which the Chinese Communist Party will likely use to monitor and control people's lives and "eventually threaten the dominance of the U.S. Dollar." He explained further that the Chinese have "created all of the building blocks that will allow a central bank digital currency to flourish."
A former CIA economic and counterterrorism analyst by the name of Yaya Fanusie believes the same. Fanusie, who is also a senior fellow at the Center for a New American Security, argued how China has long expressed its desire to have a cashless society in the future. He said that in the future, regular Chinese citizens will no longer have cash notes and coins, but "will be using digital currency that's going to be in their wallets."
Because this digital currency will be controlled by the CCP's central bank, the digital currency that will pave the way for a cashless society will also be a means for the communist government to monitor and control people's lives on another level: a financial one. Congressman Michael McCaul, a Republican on the House Foreign Affairs Committee, argued that this gives the communist government an "unprecedented access to people's financial transactions" and "data on behavior and on how people spend."
Bethel warned that this digital currency will enable the People's Bank of China to be able to "look, peer inside of every single transaction, what everyone does, 24 hours a day, 7 days a week." This is especially important for Christians and other minorities in China who are often the subject of persecution, detention, and more severe forms of punishment. Using digital currency can empower the Chinese government to cut off one's access to the power of spending if and when they deem that the person is unworthy or wants to keep that person in check.
Fanusie warned, "This technological ability is something the government has never had before."