China Drafts Law on Digital Yuan

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In a surprising move, China’s central bank has drafted a law that will legalize a digital form of yuan and outlaw all other digital currencies that might want to compete with it. Officially called Renminbi (RMB), it will soon become the country’s sole digital currency, with no individual or unit able to sell tokens or digital tokens that replace RMB in market circulation.

Simultaneously, the People’s Bank of China has recently been cracking down on crypto gambling sites. It is targeting those who use Tether in a move to outlaw any form of cryptocurrency that might put the digital yuan in trouble.

Countrywide Ban on Digital Currencies

The new revision of the proposed law includes a line that says anyone that tries to sell or produce tokens, digital tokens, and coupons is susceptible to a fine five times of the proceeds involved. With this move, the central bank is effectively outlawing all other digital currencies in favor of the digital yuan.

Very soon, China could become one of very few countries with an officially recognized digital currency. Libra, Bitcoin, and Tether, will be forever removed from the Asian country, effectively striping down numerous already booming industries.

The digital yuan will thrive because of this. Recently, China has been testing it heavily. For example, in Shenzen, the authorities gave over 5,000 people 200 yuan ($30) to spend in over 3,000 stores. The test was a success and shows that the Chinese people are ready for digital finances.

Of course, problems are to be expected. The central bank’s head of crypto research doesn’t expect things to go smooth in the beginning, admitting to certain problems. He hopes that they will be overcome with the oversight of the central bank and its chairmen.

Counterfeits have already begun to circulate in China with numerous digital wallets popping up on the market as soon as the new law was drafted. Just like with regular money, the central bank will need to fight forgeries of the digital yuan. But, the fact that all transactions involving the digital yuan must be confirmed by the central bank will defeat any and all fakes.

A Crackdown on Gambling Sites

Even though online gambling is illegal in China, people have managed to enjoy their favorite games through VPNs and other methods. The Central Bank is well aware that money is being transferred to offshore sites and is doing everything it can to prevent it.

A recent report says that the Central Bank has assisted the police in Huzhou City to crack down on crypto gambling sites using Tether. The money-laundering operation involved three gambling sites and laundered around 120 million yuan. A total of 77 suspects were apprehended, showing once again that the Central Bank plans to keep competitors off market.

Such moves are showing that the authorities will do anything under the guise of money laundering (or something else) to keep the digital yuan the only such currency in the country. Soon, Bitcoin will be a thing of the past in China with Renminbi taking its place.

October 28, 2020: • No Comments

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