Anxiety In The US As China Creates The First Major Digital Currency

Encouraging Use

China already has 770 million mobile payment users. 

To facilitate acceptance, China conducted free money lotteries. 750,000 people got some free money in these lotteries. It is working on a method to allow the app to work without an internet connection. 

Coming soon, China will require everyone to use the digital currency. Paper money will be invalid. 

China will know who is paying, where they are paying, and how much they are paying, and what they are buying.

Pros 

  • Merchants can avoid transaction fees 
  • Problems with handling cash vanish.
  • Speed. Payment is immediate.

Cons

  • Privacy concerns of all sorts. Governments can and will snoop.
  • I fear things like "expiring money". 

De-Dollarization a National Security Issue?

I do cheer one thing, and that's the de-dollarization of the global economy. 

Under the guise of national security, Trump made a global mess of things for reasons that had nothing to do with security. Unilateral sanctions on Iran and Gazprom are key examples. 

In general, competition is good. Soon, countries will be able to tell the US to go to hell unless there is full international cooperation.

The dollar isn't going away and it will not be replaced by the yuan any time soon, if ever. But the end of the ability of the US to unilaterally call all the shots is on the near horizon.

That's a welcome development. So is anything that forces the US to mind its own business.

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