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China Decides To Run Digital Currency Trials To Boost Economy

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China, the world’s second-largest economy, was already witnessing a slump in the latter half of last year and its growth again seems to be bleak. China’s Zero-COVID policy and its highhandedness in handling the COVID crisis are causing hiccups in supply chains, delays at ports and a lockdown in Shanghai which in turn is posing a grave threat to the country’s economy especially when it comes to Beijing’s GDP targets.

In a quest to strengthen the country economically and become a global superpower, China decides to run digital currency trials of which the real purpose seems to be keeping a close eye on data and mass transactions, reports suggest.

As the visibility of the government increases, authorities are called upon to monitor and enforce compliance on transactions, with the power to wipe out amounts in digital currency without any permission from its users. In fact, entrusting the PBOC with a digital currency policy is another way of targeting private tech firms in the country. Around 90% of mobile payments in China run through two tech giants, stated Alibaba and Tencent, citing Portal Plus.

Zou Chuanwei, a digital currency specialist at a research institute in Shanghai, said that the government’s digital currency expansion is established in a way that could influence the market of Wechat Pay and Alipay. For instance, authorities could mandate compulsory use of e-yuan for citizens and shopping while merchants are the wisdom to refuse the usage of Alipay and WeChat. Likewise, e-Yuan is directly loaded into the e-wallets of digital users by the state banks, automatically granting access to the digital data that is controlled by these firms. If Chinese citizens begin to use the digital yuan widely, a plethora of data would be accumulated in the hands of the government.

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