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China Digital Government The Almighty Buck

China Starts Digital Yuan Trial By Giving $30 To 50,000 People (nikkei.com) 55

China is starting a first-of-its-kind digital yuan trial by distributing 10 million yuan ($1.5 million) of the digital currency among 50,000 participants selected by lottery. "That equates to each participant being granted 200 yuan, or $30, to spend at any of 3,389 designated restaurants and stores," notes Nikkei Asian Review. From the report: The trial ends next Monday. Other tests of digital currencies have mainly been done by the public sector, but this is the first to involve a large number of ordinary citizens. There was no cost to take part in the test. More than 1.91 million people applied to take part with and acceptance rate at less than 3%. Ostensibly, the digital yuan project is meant to make China's currency more international and user friendly. But critics say it would also allow authorities to more easily track funds.

Apprehensions over China's digital currency assume such transactions will not stop at the nation's border. If the digital yuan is taken up across the world through trade and other avenues, it could undermine the dollar's status as a global key currency. Sanctions that ban dollar transactions would risk losing effectiveness. And if the digital yuan becomes the international standard in terms of technology, it could create a hindrance to other nations' issuing their own digital currencies.

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China Starts Digital Yuan Trial By Giving $30 To 50,000 People

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  • Western governments should have issued digital currency a long time ago. If China sets the standard with the digital Yuan then the west has no one to blame but themselves. It has been obvious for a long time.

    • Nah. Western governments would claim China stole the technique of digital currency from western countries, and start to ban them.
    • by nrlz ( 6315852 )
      But China's implementation of this digital currency requires a national ID and each unit of currency is linked to that ID in a national database. Each financial transaction is a record in the national database. This wouldn't fly in countries that value privacy.
    • by tokul ( 682258 )

      > Western governments should have issued digital currency a long time ago.

      Yeah. We should have invented credit cards ages ago.

    • Comment removed based on user account deletion
  • by Kernel Kurtz ( 182424 ) on Wednesday October 14, 2020 @07:32PM (#60608364)

    Even the USA's erstwhile allies are looking to replace the dollar as a global trading currency due to the Americans essentially blackmailing countries and companies that use it who do anything they don't like. (warning paywalls)

    https://www.wsj.com/articles/t... [wsj.com]

    https://www.economist.com/brie... [economist.com]

    https://www.cnbc.com/2018/08/2... [cnbc.com]

    Not surprisingly China will certainly be wanting their currency (both digital and traditional) to become more dominant, though I would not expect them to wield it any less oppressively than the US does, and for that reason I don't think it will be the replacement everyone is looking for.

    • by rtb61 ( 674572 )

      The real trick with making the Yaun more popular is having some place worthwhile to spend with certainty and with reliability of value at that location. The ticket for that seems to be Hainan. That combination of tropical hide away and business locale, with development pumped up by the government of China as only they can. The more popular Hainan becomes the more if reinforces the idea of the value of the yuan, because you have some where worthwhile to spend it.

      Right now the leading global spot for profita

    • The last new currency that was going to replace the dollar was the Euro . . .

      If US sanctions are troublesome, then imagine the restrictions and jurisdiction claims that might flow from CCP-driven policy goals.

      • The last new currency that was going to replace the dollar was the Euro . . .

        If US sanctions are troublesome, then imagine the restrictions and jurisdiction claims that might flow from CCP-driven policy goals.

        That is what I said. They would be much the same.

        I think it will be a good thing if the global currency exchange simply become more fragmented over time. Hegemony is bad no matter who is wielding it.

        • Yes, it is. A number of middle east nations oil nations have been pushing to have a gold coin for a barrel of oil. In essence, it ties all money to the gold standard.
          That will have its own issues, but hey, probably better than what we currently see.
          • by ghoul ( 157158 )
            Never gonna happen. Saddam wanted to sell oil for Euros and Gaddafi wanted to sell oil for Gold. BOth countries got Democracy from 35000 feet. Anyone else wanting to move off the petro dollar will soon find a social media based color revolution in their country.
      • by ghoul ( 157158 )
        China does not interfere in internal affairs of other countries. They are focussed on development and trade unlike the US which arrogates to itself the right of acting as Global Cop. China does not even sanction Taiwan so forget about it interfering halfway across the world.
    • The US does not publish the fact that good old GOLD trading in middle eastern blocks ensures war loving baddies can fund and grow their influence and reach. And the level of off-the-books gold trading is at eye watering levels. Digital currency is overdue. Visa, Mastercard and Paypal have had it too good for too long, wiping 3.5% off the top, and the profits to tax haven. Bring it on. The trouble with this is a number of countries with USD fixed local currencies that make moving money out of that countr
    • Comment removed based on user account deletion
  • by gurps_npc ( 621217 ) on Wednesday October 14, 2020 @08:44PM (#60608566) Homepage

    People trust the US $ because of 2016-1776 = 240 years of good reputation (a mere 4 of bad rep does not change things, yet).

    The idea that merely being the first to market will somehow give China or some other country an insurmountable advantage is ridiculous.

    Especially as China is not really the first to market. Even ignoring bitcoin because of no national backing, there is... the US $. The US $ is mostly a digital currency already. Credit cards, checks, wire transfers, etc. Yeah, cash exists, but I have spent thousands of US dollars via digital means in the past month and I did not exchange any bills or coins. The fact that in addition to the digital nature it can also be easily converted to physical currency is a huge benefit - one that China does not seem to be offering.

    The only real 'advantages' over current digital money practices China is offering is them personally tracking every yen. That is a 90% a benefit to THEM, not the people. Oh, it might help a bit with fraud and crime, but that is not a major problem while privacy is.

    So why would you prefer to use their privacy destroying 'digital' currency?

    • Overall, yes.
      But, with our running up MASSIVE trade deficits, along with massive $ deficit/debt, we are looking at hitting a wall SOONER, not later.
      America can not keep running up deficits/debt like reagan, W, and trump have done to us. And even now, the Dems have joined in with their GD stimulus bill push (total insanity).
    • by ghoul ( 157158 ) on Wednesday October 14, 2020 @10:55PM (#60608802)
      The US dollar dominates internatinal trade because all payments in the Swift system need to go through New York banks and hence fall under the jurisdiction of New York courts. The point of building a digital yuan system is to bypass Swift. Russia too is building its alternate to Swift. The Meng case is a clear example of how using dollars introduces extraterritoriality of US into places they have no business being. A Chinese company selling servers to Iran using a Hong Kong based bank should never fall under US law. But since that bank HSBC wants to use the New York based Swift system it cooperates with extra territorial warrants and turns over info to FBI which in turn gets anada to arrest her as she is changing planes to go to South America. The Swift system give US tremendous leverage to force others to do things the US wants even if they are not legally bound to do so. China no longer wants to be at this disadvantage.
      • Mod up. There is no guarantee that the new SWIFT replacement systems will report back to the USA, which will be a big loss to USA intelligence collection. The second thing is that China could construct a hardened mobile phone with a 500GB one-time-pad that does all dedicated Swift terminals do, only better. The thing about BitCoin and the like, is payments via exchanges are caught.
  • by hdyoung ( 5182939 ) on Wednesday October 14, 2020 @09:13PM (#60608618)
    The yuan replacing the dollar? Excuse me while I lose absolutely no sleep over this possibility.

    The US has it's own set of unique problems, but none of them are showstoppers for a default world currency. Here is a list of the relevant issues with China:

    Very poorly defined property rights
    Very poorly defined corporate rights
    An absolutely ancient culture but a 50-year old government barely out of it's diapers
    An even younger stock and banking system
    A history of making rapid leaps forward followed by equally stunning leaps backwards.
    No independent judiciary
    Run by a dictator

    Any one or two of these would be a "nope not gonna happen". Honestly, I'm not even sure China wants it's currency to overtake the dollar. Hosting the default currency has perks but also comes with a lot of hassles. A large part of our national debt exists because other countries basically beg the US to sell them bonds.
    • Trump's new Supremes pick believes that US dollars are unconstitutional, so maybe don't fall asleep quite yet.
    • If they wanted it to be the new Ruble, it would make more sense.

    • An absolutely ancient culture but a 50-year old government barely out of it's diapers

      Sure, but a 50 year old government that has managed to move the most people out of poverty in history.

      An even younger stock and banking system

      Which has not caused a worldwide recession that lasts a decade, and with a government intent on removing more shackles to allow it to do as they please.

      Run by a dictator

      Which is a complete misunderstanding of how the CCP works, let alone a government over 1 billion people. To deal with China properly, you need to actually understand actual facts, instead of repeating the same Cold War cold takes.

      • My understanding of China is based on the last 10-20 years of developments. I'm well aware that these things are nuanced and that a good chunk of what I learned in civics class in the 1970s was US propaganda. Also, I realize that my own country has it's own set of problems that we could dissect.

        An absolutely ancient culture but a 50-year old government barely out of it's diapers

        Sure, but a 50 year old government that has managed to move the most people out of poverty in history.

        True. This is a spectacular accomplishment that should be recognized. However, China has a history of taking massive leaps backwards as well. One jump forward, even a huge one, doesn't qualify it for leadership.

        An even younger stock and banking system

        Which has not caused a worldwide recession that lasts a decade, and with a government intent on removing more shackles to allow it to do as they please.

        Ju

    • by AmiMoJo ( 196126 )

      It depends what happens in November. The USD has been losing ground to other big stable currencies like the Euro and Yen because the US is now seen as somewhat unreliable. The trade war has not helped either, people don't want to get caught up in that.

      Competition is good though, right? It would be better all round if there were at least two major "global" currencies. I've noticed that a lot of banking accepts USD and Euros now, which is good for me because I can avoid some fees.

    • And OPEC sells Oil exclusively in US dollars
      https://en.wikipedia.org/wiki/... [wikipedia.org]
      https://en.wikipedia.org/wiki/... [wikipedia.org]
  • Combine digital currency with the fact that TLS 1.3 is forbidden and you have a great environment for cybercrime. Seriously, it's like they are daring hackers to steal from them.

The 11 is for people with the pride of a 10 and the pocketbook of an 8. -- R.B. Greenberg [referring to PDPs?]

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