The China uprising may affect how we think about cryptocurrencies.
Though not widely reported, there is currently a massive uprising in China. Riots and resistance to zero-Covid policies including lockdowns have seen Chinese people pour onto the streets and riot. They are chanting “Give Me Freedom or Give Me Death” in haunting similarity to Iran’s current battle call: “Women. Life.Freedom”.
In a first, some Chinese citizens are calling Xi Jinping, the General Secretary of the Chinese Communist Party, a traitor of the people.
An event like this from everyday Chinese citizens has not been seen since the Tiananmen Square uprising.
The Chinese government have erased and blocked a lot of the footage on the Chinese version of Twitter—Weibo. But videos have been leaked and put onto Twitter for the world to see.
TikTok is also seeing a lot of the footage smuggled out.
China has a social credit system, whereby citizens can report other citizens for anti-social behaviour. The government also has a say, downgrading people for infractions like not paying debt and not taking the bin out correctly, all monitored by on-street surveillance cameras. Much of the footage of riots involves people knocking down these very cameras.
As footage circulates online, given the nature of the secretive authoritarian regime, it’s unclear exactly how far reaching and extensive the civil disobedience is extending.
China uprising and the Digital Yuan
Last year, China introduced the Digital Yuan. While not a cryptocurrency, it is seen as a forerunner of CBDCs — central bank digital currencies, which are cryptocurrencies controlled by the state.
CBDCs are centralised cryptocurriences. This is not the same as Bitcoin, which is a decentralised cryptocurrency, meaning no one organisation or person controls it.
CBDCs on the other hand are designed to be controlled. While the digital Yuan isn’t a CBDC — yet, the world is watching to see if indeed the government will use the currency in a bid to punish those involved in the protest.
Will the Chinese government punish the Chinese people by “switching off” their money?
By using the digital Yuan, the government has a clear picture of all financial transactions that happen using the currency. Many have said the reason we need to be worried about CBDCs is that the controlling body governing them can turn parts of it (or all of it) off like a light switch.
Was the digital Yuan introduced to control transactions and personal behaviour?
Digital Yuan Uptake
So far, uptake isn’t what Bejing expected. By the end of August this year, transactions totalled 100 billion yuan. Beijing said the poor uptake was marred by Covid-19, and a slowing economy. But is that the real story?
Britain, like many other countries, is forging ahead to introduce a CBDC, the “Britcoin”.
It leaves many to wonder if bringing in centralised cryptocurrencies, controlled by governments and traditional banks, is really such a good idea. It goes against the very ideology of Bitcoin, the first cryptocurrency, and why it was created.
For now, it’s all eyes on China as the situation unfolds.