140 million Chinese punters adopt Digital Yuan and spend up big

140 million digital wallets capable of storing China's central bank digital currency – the Digital Yuan or E-CNY – have already been issued to individuals, and another ten million businesses have signed up too. So said Mu Changchun, director of the Digital Currency Research Institute of the People's Bank of China, at an event …

[Pascal Monett]

"is working on encryption algorithms, data security"

Um, you've already handed out tens of millions of wallets. I would have preferred you worked on that before letting people sign up.

There's enough hacking history around funny money and it's all available on the Web. You should have done your homework first.

After all, it's not like there isn't a national currency available. There was no rush to put E-CNY in place.

[martinusher]

Re: "is working on encryption algorithms, data security"

To be kind (and to assume they're not stupid) you'd guess that they'd start the ball rolling using standard encryption algorithms and hashing functions and then work on improving them because they know that this tool is going to be under constant attack. Its jst too tempting a target for criminals and state actors alike.

The currency is an intriguing concept but I fear it won't be entirely usable until a way is found to provide the capability that survives breaches of the protocol -- a sort of "defence in depth" where any breach can be rapidly discovered, contained, isolated and removed before it threatens the entire system. I'm still waiting to see if they've figured this out.

[Anonymous Coward]

Re: "is working on encryption algorithms, data security"

Given that under Chinese Law it has to have a backdoor National Security component, spending time weakening extending present widely vetted encryption algorithms makes little plenty of sense.

[Anonymous Coward]

Working something out before release? Try telling that to Microsoft. :-)

[aks]

Exchange rate

"can greatly reduce the cost of transfers"

That's a nice theory that isn't and won't be true in practice.

The rest of the world already has an effective international currency system through Visa, MasterCard and others. Most providers of debit or credit cards allow payment cross-border but the exchange rate used is rarely the inter-bank rate (there are those rare exceptions).

[Clausewitz 4.0]

Re: Exchange rate

Any cryptocurrency will greatly reduce the cost of transfers, as it already happens. Anyone can buy software from Salvadorans, Russians, North Koreans, without any banks in between.

Direct Govs deals, those not unilaterally sanctioned, will most likely use eCNY. To some length, even a few slapped with sanctions will still use eCNY.

Others will use a mix of Bitcoin, Monero and national remittance systems integrated onto that, with direct conversion to fiat currency, or not.

The main goal being, the crash of USA dollar to bring a new balance to the force, in a new order.

[Geez Money]

Re: Exchange rate

Username checks out.

[Anonymous Coward]

Re: Exchange rate

@Clausewitz 4.0

Your U.S.A. superiority complex being threatened is it? Your last sentence is utter bollocks. Go back to sleep

[Clausewitz 4.0]

Re: Exchange rate

@idiot taxpayer here again

It was not my intention to look superior, dear friendo.

I tried to state my arguments in a most polite way.

If you believe the goal is not plausible, I am all ears to digest your arguments.

[T. F. M. Reader]

Will history repeat itself?

Historically, China doesn't have a good record of managing novel forms of payment.

Consider the following rough sequence. Nearly worthless (and thus difficult to use) bronze coins and "strings" thereof from a few hundred years BC till something like the 12th century. Then Song dynasty paper money backed by (still nearly worthless) bronze. Then Song and later Yuan dynasty fiat paper money allowing exporting bronze. Then hyperinflation of paper money. Then new Ming dynasty coins only to discover that copper mines were nearly empty so that the coins were more expensive to produce than they were nominally worth, hence counterfeiting. Then more fiat paper money with more inflation. Then the government banning their own coins (!), multiple times (!). Then successive rulers declaring the predecessors' money invalid (that worked out well - money good in the morning becoming worthless in the evening by government decree).

Throughout all of that turmoil silver was considered valuable, except by the government(s) - commodity money has some advantages over fiat, notably inflation-wise, but governments are wary because they can't control the supply. Finally someone in the Ming dynasty decided to adopt silver for government transactions (including taxes) as well. By that time China was the world's largest economy (anyone who gasps at the prospect today - take note), but it had no usable silver mines. Americas had lots of silver though, and so Spanish galleons literally supplied the means of payment to China via Manila. That worked out really well for the Chinese government monetary policy, as everyone can imagine, for a few hundred years.

Fast forward to the 21st century, with only partially convertible and pegged to the dollar renminbi (US dollar today, not Spanish dollar as in the late 19th century, granted). I think I am going to sit back to watch how this new new thing will work out - I may not live to witness the final curtain, but it will be interesting nonetheless.

[Anonymous Coward]

Re: Will history repeat itself?

"Historically, China doesn't have a good record of managing novel forms of payment."

Historically, China doesn't have a good record of adhering to treaties it signs. (Hong Kong, WTO, etc.) That will limit the trust components of any Chinese Government crypto outside of China.

[PhilipN]

Poor understanding of “money” here

I almost never touch paper money these days. Be that as it may.

Even when I did I was passing to the vendor the right to receive the hard stuff from the Bank of England. He passed it on to his bank which then took on the obligation to pay him. The bank note was merely a paper-based negotiable instrument which happened to be acceptable as “legal tender” for moving obligations around.

Digital currency movements are virtually (sic) identical.

And as evry fule no any mechanical system which works well lends itself to easy computerisation.

But, oh, criminals are interested in money? Really….. no kidding….?

[Doctor Tarr]

Re: Poor understanding of “money” here

True dat. And there is no such thing as ‘money’, it’s just some one else’s debt. And when a bank lends you money, sorry creates an obligation on you, they create 90% of it from nothing.

[Anonymous Coward]

I see only one reason why so many governments are all excited about digital currency:

They want to tax the living daylights out of the black and grey markets. Digital currency is *traceable* when it is created by central banks. It is part of being verifiable. But you think China allows *anonymous* cash-like transactions, or that any other government's financial arm will? Perish the thought - getting rid of cash has long been a dream of governments.

Think of all the social "ills" they can curb by removing cash from circulation - prostitution, black market guns and drugs. Black market *anything*, for that matter, unless a means can be found to skirt Big Brother Currency Monitoring.

On the flip side, most people are *already* fully traceable through their credit cards and debit cards. I know I've used a whole $50 in cash in the past 2-3 months....

[adam 40]

If they wanted to curb prostitution

all they would have to do is round up everyone out after dark in Shanghai. EVERYONE IS AT IT.

[Anonymous Coward]

Digital currency is *traceable* when it is created by anyone.

That is why Bitcoin is no longer an anonymous vehicle for wealth transfer. (e.g. The FBI getting Colonial Pipeline's bitcoin back.)

Always remember this phrase; "It's a blockchain, stupid!"

[Clausewitz 4.0]

Re: Digital currency is *traceable* when it is created by anyone.

Bitcoin was never meant to be anonymous, but there are ways to make it untraceable. It is not 100% foolproof, but there are.

Go for Monero if you want anonymity.