The subject of cryptocurrency has been a hot topic all around the world for, at least, the last decade.
Since the invention of Bitcoin in 2008, by an individual or group that went by the pseudonym Satoshi Nakamoto, people have been speculating as to whether we will see virtual versions replace existing currencies around the world.
While Bitcoin has risen in value, with individuals and companies buying it up and attempting to ‘mine’ the remaining coins, it has always remained an elusive commodity to the general public. Most average people aren’t involved in Bitcoin, and it would be hard to see it replacing the yuan or dollar any time soon.
That being said, other cryptocurrencies are coming into the market and one in particular, named e-RMB, has already been trialled in different provinces in 2020, including Shenzhen, Suzhou, Chengdu and some newer parts of Beijing.
In October of this year, the Chinese government also rolled out a ‘lottery’, whereby 50,000 residents were gifted the equivalent of 200 yuan to spend in 3,800 shops and restaurants in the city of Shenzhen, using a digital currency. The participants were told to download an app called Renminbi in order to use the ‘money’, in what is said to be the largest trail of digital currency in the country so far.
However, whereas Bitcoin was created as an alternative to relying on banks (it’s not controlled by any one party or organisation), the virtual currencies China are trialling are backed by the state-run People’s Bank of China, meaning they are governed and monitored by the state.
These new cryptocurrencies are set to replace the old-fashioned cash system, as well as streamline current currency conversions across the world into an easy-to-manage one-stop-shop for international import and export.
But, as nice as it sounds, virtual currency has its critics. Although we use cash for very little these days, the idea of making it completely obsolete can be quite a daunting thought. Let’s take a look at some of the pros and cons of a cashless China:
As with everything in the modern age, convenience is king. Being able to pay for absolutely everything with an app on your phone means never worrying about change for the bus or losing your bank card again
With everything running through an app, people will be able to worry less about credit card fraud or identity theft. And with new technologies like face recognition and fingerprint scanning, the chances of someone using your app fraudulently are greatly reduced too.
As well as online safety, individuals and small business owners will be physically safer as well. If nobody carries cash, the likelihood of being robbed goes down. This is especially true for small business owners like market stall operators and street vendors, who have to carry large amounts of cash on their person at the end of the day.
Lack of freedom
Most of us are not interested in taking part in criminal activities, but there are times where we don’t want to share our spending with the world. Intimate purchases, for example, are often paid for in cash to protect one’s identity, as well as taking part in activities online in other countries. Gaming and gambling sites, such as the ones listed and reviewed at gamble.xyz, are legal in many overseas territories, and Chinese citizens may not be able to take advantage of foreign opportunities with closely monitored virtual currencies.
Heavy reliance on your mobile phone
While paying for everything using an app on your phone might sound like the easiest option, what happens if your phone dies or you lose it? Usually, in this instance, you probably have a card or some cash on your person, to pay for anything you need while you charge your phone or wait for a replacement, but these measures will become redundant in a completely virtual world.
Not everyone finds it easy to adapt to new technology
Chinese has an ageing population, and some people find it hard to adapt to new technologies and software, such as smartphones and apps. Think about your grandparents; how would they feel if they had to carry a smartphone around with them to make every single purchase. Some people are not tech-savvy and it’s unfair to assume everyone will adapt easily to a cashless system.
There’s a lot to be said for bringing in a new cashless system across China. Black markets will be quashed and purchases made easier, but at what cost to personal freedom? Sometimes, we don’t want everyone knowing our business, and virtual currencies will put an end to any privacy we have left.