China could set expiration dates for digital yuan. China has been testing expiration dates for the digital yuan which would encourage citizens and companies to spend it more quickly.
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China could set expiration dates for digital yuan.
According to the WSJ, Beijing has tested expiration dates on its digital currency the digital yuan to encourage users to spend it quickly, for times when the economy needs a jump start.
China is a world leader in the development of Central Bank Digital Currency.
China is a world leader in the development of Central Bank Digital Currency (CBDC), with 200 million yuan already being circulated in pilot projects across the country.
International collaboration has also started to develop between China’s central bank and countries such as Thailand and the United Arab Emirates.
China’s sovereign digital currency, so-called the Digital Currency Electronic Payment (DC/EP), is controlled by a central authority and is administered through commercial banks.
China’s version of the digital currency is controlled by its central bank, which will issue the new electronic money, unlike other cryptocurrencies such as Bitcoin that exist outside the traditional global financial system and are not classed as legal tender.
Read more about CBDC here.
The digital yuan is trackable.
The digital yuan is trackable which means central banks and government would be able to track each and every transaction easily.
This digital currency would also be able to track spending in real time, this gives government immense power to monitor not only the economy but its citizens.
China could set expiration dates for digital yuan.
It could be programmed to restrict users from purchasing certain items in certain timeframes.
It could also be potentially used to immediately issue fines to citizens for even minor offences such as jaywalking.
To put it simply, central bank digital currency means that your financial privacy would be pretty much non-existent.
Why would a Central Bank want to impose expiration dates on digital currency?
Central banks cannot simply force people to spend and invest, even if the policies they come up with are consistently aimed at incentivising debt.
During an economic downturn, expiration dates could be added to any kind of ‘stimulus’ package forcing recipients to spend the currency by a certain date rather than save it. This would speed up the velocity of money and therefore help to kickstart the economy.
According to the WSJ, more than 100,000 people in China have downloaded a mobile-phone app from the central bank enabling them to spend small government handouts of digital cash in places such as Starbucks and McDonalds.
China has been developing its central bank digital currency for a while now, screen shot pictures started emerging online in April 2020 of this new digital currency.
It seems to work in a similar way to other popular payment apps or digital wallets, such as CashApp or PayPal.
With all the current government restrictions it has been the perfect platform to propel society into a fully digital/cashless economy.
Central Bank Digital Currency and Gold.
It is reported that the new digital currency will be pegged to the national currency the Yuan. However, many in the precious metals community have been debating that the digital currency could in fact, be part-backed by gold because of the sheer amount of gold that has been purchased and accumulated by China over the recent years.
This could then give society in general confidence in the new digital currency, as it will be backed by a tangible asset and would not be able to be ‘digitally-printed’ like current fiat currencies.
Although this is highly speculative, and sources are extremely vague, it does highlight the almost frantic online debate about this subject.
Jim Rickards who has written books such as ‘The New Case for Gold’, has suggested countries like China may be building towards a gold backed digital currency as a stronger competitor to the U.S. dollar. He also speculates that China may not yet have enough gold holdings to fully implement the gold backed digital currency.
China’s development of its digital currency has forced other central banks to step up their digital currency programs.
Many countries around the globe are now developing their own CBDC’s.
Christine Lagarde (President of the European Central Bank) has stated that,
“We’ve started exploring the possibility of launching a digital euro”.
In a recent flurry of tweets from the European Central Bank, it is now obvious that work on a digital euro is gaining pace.
In a recent tweet, ECB Executive Board Member Fabio Panetta states:
“Responses to the public consultation show the high expectations that people have for a digital euro. They will provide valuable input for our work and decision on whether to start a digital euro project. We will move rapidly but take the time to do it right.”
It seems that Central Banks now want full and complete control of monetary transactions under the guise of it being more efficient for consumers.
More and more people are now choosing to exit this monetary system, and defend the purchasing power of their savings and salaries as well as their financial privacy via precious metals.
Gold is a tangible and liquid asset that is neither backed by debt or the responsibility of a third party, it has no counterparty risk.
Gold can be stored outside of the banking system, protecting your wealth from the risks of fractional reserve banking, debt, CBDC tracking, digital currency expiration dates and systemic financial collapse.
Gold is the ultimate safe haven asset.