The digital yuan, the government e-currency being tested in China, will likely have an expiration date function. The government will be able to shut down the digital yuan after a predetermined date. In this way, you will force citizens to spend money if necessary.
According to the Wall Street Journal reports, several options for entering expiration dates in the digital yuan have already been tested. The introduction of such a feature would be a nightmare for people looking to accumulate the digital yuan, but it would greatly increase the central bank’s ability to control the economy. The People’s Bank of China can stimulate consumption during economic downturns by announcing that a portion of the digital yuan will expire on a specified date. This would force their holders to spend the coin quickly.
The People’s Bank of China is the central bank that is currently carrying out the most advanced work on its own digital currency. Already in the past year, he has run his tests in several major cities. As part of the tests, a set of digital yuan was assigned to the selected citizens.
According to Bloomberg reports, the White House is wary of China working on its virtual currency. It is seen as an attempt to challenge the dollar by strengthening the yuan’s international position. A digital yuan could also make it possible to circumvent US sanctions. It will be an alternative payment channel for the international banking system. The PBOC digital currency will also give the government of the People’s Republic of China complete control over domestic financial transactions. They can closely track all transactions made by the Chinese and impose financial penalties on them more easily.
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