Will the Chinese government destroy cash to introduce its own digital currency? This scenario, although quite drastic, may turn out to be true.
According to a report issued by Binance, the Chinese digital currency is to have the equivalent of 1: 1 on the Juan. It was also stated that the main goal of PBOC is to replace all banknotes and coins on the market. In turn, We need to remember that quite a similar situation already in April this year was described by CEO of the BitMex cryptocurrency exchange - Arthur Hayes.
Hayes pointed that in five years the vision of financial privacy may already be completely dead. In this prophecy. China could be an example of a country that will strive hard for such a situation. Try to imagine that you went to this country and you are going to shop. In this country, however, cash has been canceled, to make a payment you must use a special mobile application. Of course, you do not see this problem because it is quite a convenient solution. The transaction is fast and efficient. The seller is also happy because he does not have to worry about running out of money to spend the rest. However, not everything is as colorful as it may seem to you. Now think about the other side of the coin. Data on your preferences has just been sent to a centralized company that controls the application installed on your phone. You are completely deprived of privacy because from now on strangers have access to what, where and when you bought.
Hayes pays special attention to the fact that governments want to control literally everything. They strive to have insight into every aspect of their citizens' lives. Therefore, money in its traditional form can become simply uncomfortable for them. By making payments through cash, you are able to protect your privacy. No one has insight into who, where and for what you gave the money. If governments go so far as to eliminate the traditional physical form of money, they will have the opportunity to track every aspect of your life. Nothing will be able to escape their attention. A citizen who fails to meet the set standards will simply be excluded.
cryptocurrencies as a savior
In this situation, cryptocurrencies may become the last escape. To maintain privacy, people will start making transactions via Bitcoin (BTC) or other altcoins. Of course, according to some people, this might be a tmporary solution because governments may ban payments in other virtual currencies than their own.