ASSESSMENTS

With the E-Yuan, China’s Government Cements Its Hold on the Economy

MIN READAug 9, 2021 | 20:54 GMT

A photo illustration shows digital currency coins in front of a Chinese flag in October 2019.

A photo illustration shows digital currency coins in front of a Chinese flag in October 2019.

(Chesnot/Getty Images)

Recent moves by the Chinese government and large state-owned banks to operate a “digitized” payments system and an official digital currency underline Beijing’s efforts to erode private payments platforms’ dominance and make financial transactions data available directly to the government. A regulatory crackdown on technology firms, statements by key officials on data security and financial risk, and a People’s Bank of China (PBOC) white paper on an official digital currency, the “e-yuan” (also referred to as the “e-CNY” or the Digital Currency Electronic Payment) all suggest Beijing’s growing interest in central bank digital currencies and financial technology (fintech). At the same time, the payments system and the e-yuan give Beijing a new tool to track domestic financial transactions and maintain and reassert a state monopoly on currency issuance and payments....

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