Government-controlled digital currency would give China’s government unprecedented power to track transactions and monitor citizens financial actions
As the government of China cracks down in all spheres of life, from reducing individual freedom, suppressing free speech, and tightening control of the media, it seems that their authoritarian agenda extends to digital currency as well.
As reported by Bloomberg, the government of China is creating their own digital currency (aka Cryptocurrency)
The currency would function similar to bitcoin, but it would be issued by China’s central bank, putting it under the control of the state.
It would give the government the ability to track transactions and gain a deeper understand of consumer behaviour. Of course, it would also let the government track any purchases that were seen as being against the communist party, which could lead to arrests and punishment.
Chinese consumers have embraced digital currency – so far of the privately controlled variety – and this has reduced the power and authority of the state. Rather than embrace the trend of their citizens gaining more financial freedom, China is aiming to take over the so-called “cryptocurrency” space.
It’s easy to imagine that once China builds up their own government-controlled cryptocurrency, the goverment would take steps to shut down bitcoin and other private alternatives within the country.
This fits with China’s approach in other spheres, including social media. They ban Facebook and Twitter, but have created government-controlled alternatives. Those alternatives have the same functions as any social network, except they are controlled by government officials who can censor, and track any user. It’s authoritarianism, but well hidden.
As we consider this, keep in mind that the consequences for going against the government in China can be torture and death.
The tracking possibilities of the system would be disturbing. As Duan Xinxing, vice president of Beijing-based OKCoin Company told Bloomberg, “For the PBOC, using blockchain, the technology that underpins the digital currency bitcoin, will allow it to trace transactions and collect “real-time, complete and authentic” data to compile precise monetary indicators such as money supply growth.”
That may sound “efficient” but it’s way too much power for a government to have. The great thing about both physical cash and private digital curencies is that it gives individuals more freedom and privacy. Our money is supposed to be our own, not something that the state can track at every moment.
But that’s not how those in power see things. They’re planning to start “phasing out” cash – as we already saw with the penny. They won’t stop there. Governments around the world, including the European Union are phasing out cash. They want a system they control in every possible way, and that means forcing all of us to eventually use a digital currency controlled and tracked by the government.
And it’s not just China and the EU. The Canadian government is following in China’s footsteps (as Trudeau loves to do), and is looking at the creation of their own government-controlled digital currency.
We should be concerned by this development. We should be ready to speak up in favour of cash and digital currencies, and we need to take a stand against overwhelming government control of our financial freedom.
Digital currency outside of government control is a good thing. It can reduce transaction costs, and provide more freedom from government intervention. But there is a huge difference between private digital currency, and government controlled digital currency, and we can be certain our government is strategizing to find the best way they can exploit that difference – at our expense.
Photo – Twitter (BTCmanager.com)