China would soon be launching its own cryptocurrency called Digital Currency Electronic Payment (DCEP) that apparently would tackle money-laundering, tax evasion, and terrorist financing, alongside online gambling.
According to the head of the People’s Bank of China digital currency research institute, Mu Changchun, he suggested that the new kind of currency could offer “controllable anonymity.”
While it would never be as anonymous as cash and coins, the government is pursuing its development in the hope that it would do its part in helping to curb illegal practices.
While more information is still needed, it appears that a user would need to comply with kind of financial and regulatory checks to bank digitally. The information would then be kept by the government, which would make it relatively easy to see where it was being spent, and of course, by who.
With gambling being prohibited in China, there has been a rise in players using third-party applications to make deposits. They would then go on to play with the use of offshore online gambling facilities. DCEP would actually make this very difficult as its usage would allow the government to know who had made the transaction.
While the new currency would work side by side with conventional cash and coins, there is no assurance that it would not replace the Yen in the future. However, with little appetite for gambling in China, this is sure to be a massive issue. At the moment, only participation in the state-controlled lottery is allowed.
The government has lauded the creation of DCEP in augmenting financial inclusion in far-flung areas where there might not be access to banking centers. Officials have also claimed that it would safeguard the country from money laundering and terrorism.
However, detractors have expressed their disdain, saying that this is just another method for China to censor its people. The government has already blacklisted websites that offer gambling, enforced curfews, and taken on Internet giants in their hopes to win the battle of the web.
Already five years in the making, it remains unclear when the currency would be ready, although Changchun emphasized that seeking full control of the information of the general public is not its goal. He uttered: “That is a balance that we have to keep, and that is our goal.”
He concluded his talk in Singapore by stating that the currency was “almost ready” and that it would be distributed by the People’s Bank of China to other commercial banks and applications, which include AliPay and WeChat Pay.
