It was at the end of October 2019 that Xi Jinping had established that Blockchain technology should become a priority for China. As such, the development of a central bank digital currency (CBDC) made in China was to accelerate.

Two years after Xi Jinping set the course, we can say that China has lost no time in its goal to eliminate cash from its territory. The final goal is to complete the Chinese social credit system with a means to control even more finely all financial transactions made by individuals.

From there, the Chinese Communist Party will be able to censor in an even more efficient way the “bad” citizens according to their criteria. A CBDC will also allow the Chinese government to put the equivalent of an expiration date on the currency issued by the People's Bank of China to force the population to consume to boost the economy if necessary.

In short, the e-CNY should mark the end of the last space of freedom that the Chinese have: the one linked to the use of cash.

Over 140 million e-CNY wallets have already been created

In early November 2021, Mu Changchun, the director of the Digital Currency Institute of the People's Bank of China, said that the number of individual digital yuan accounts had just passed the 140 million mark, while the number for businesses had reached 10 million.

While China has yet to give an official launch date for its e-CNY, the rollout of full-scale trials continues to expand across the country, now reaching over a dozen regions. With a wide range of merchants from utilities, food services, and transportation to retail and government services accepting CBDC, people have spent 62 billion yuan (or $9.7 billion) using e-CNY wallets as of October 2021.

The People's Bank of China also just gave more details about the different types of e-CNY wallets. The basic wallet will have an annual transaction limit of 50,000 yuan, equivalent to $7,800, and will only require a phone number to be activated. However, if users wish to open an e-CNY wallet for unlimited transactions, they will have to go to a bank counter with personal identification.

The progress of this e-CNY, which will eventually be imposed on all Chinese citizens, is obvious. We recall that just a year ago, the governor of the People's Bank of China, Yi Gang, said that the digital yuan pilot had seen 2 billion yuan (or $299 million) spent by people in 4 million transactions in four cities.

As a result, e-CNY has seen a +3,000% increase in transaction volume over the past twelve months thanks to the geographically extensive trials and the net space made by the Chinese government for its use. Indeed, the Chinese authorities have permanently banned Bitcoin and other cryptocurrencies for use in September 2021.

A way to guarantee an even greater success of its e-CNY.

The e-CNY, like all other CBDCs, will only be a worse extension of the flaws of fiat currencies in the digital world

The problem with these CBDCs remains the same. They don't bring anything better to the people than what Bitcoin can. In a future world where cash will tend to disappear because of the will of governments to suppress it, you will need to have a digital currency that is resistant to censorship.

These CBDCs will be digital, but they will only replicate the flaws of fiat currencies in the digital world while adding privacy issues. As a citizen, it is obviously in your interest to opt as soon as possible for a solution that will protect you from these CBDCs. That's where Bitcoin comes in.

Unfortunately for the Chinese, this will be more difficult to implement because of the pressure the Chinese government puts on its population. We will also have to see if China will try to officially launch its e-CNY at the time of the 2022 Winter Olympics in Beijing to make a big media splash.

In any case, the Chinese project will not be a world first, as Nigeria has already launched the e-Naira a few weeks ago.

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