So far, the suggestion that the CBDC will have an expiration date has been considered part of an unlikely conspiracy theory. But now it turns out that the digital yuan currently being tested in China is likely to have a so-called “Expiration Date”. In other words, the government will be able to extinguish the digital yuan after a predetermined date. Reason? Forcing citizens to spend money.
Money and expiration date
According to reports from The Wall Street Journal, various options for digital yuan expiration dates have already been tested. The idea is terrible for the frugal Chinese, but good for the authorities and the People’s Bank of China, which thanks to such a mechanism can stimulate consumption in periods of economic decline. For example, the central bank will be able to announce that part of the digital yuan will expire on a certain date. Thus, I would force the citizens of the country to storm the shops and spend money.
Today, the People’s Bank of China is also the central bank that conducts the most advanced work on the issue of digital currency. “Living organism” tests are conducted in several of the country’s largest cities.
United States anxiety
Beijing’s policy for the CBDC is reportedly concerned about the White House. Although official US officials say they do not want to participate in the digital currency issue race, Bloomberg adds that China’s efforts are actually seen as an attempt to challenge the dollar by strengthening the yuan’s position.
Even worse, the digital yuan could theoretically allow US sanctions to be circumvented. Thus, it would be a tool needed by, for example, Iran, North Korea or possibly Russia.
That’s not all, because the digital currency of the People’s Bank of China would also give the Chinese authorities total control over domestic financial transactions. In practice, the government was able to track citizens’ consumption habits. The idea is also reminiscent of the totalitarian system created several years ago by the Polish author Janusz Zajdel in his novel “Limes Inferior”. Money is used to control the citizen and keep track of where he is now.
It is worth adding, however, that in the 20th century Washington also used similar tools, which during the Great Depression urged citizens to increase consumption with information that the dollar would devalue.
