I recently read an article on here about China giving a new crypto coin to the residents of Suzhou in order to test the coin, you can check it out here.

I think it is interesting that the Chinese Communist Party (CCP) is getting involved in issuing crypto. Not only are they creating these new coins but they are actually giving some of them away to their citizens. This might sound really cool, I mean I like free money as much as the next guy but there is a price.

First of all there are numerous “requirements” to be eligible for the coins, through these requirements I am guessing that the CCP will have an easier time tracking how much money customers have and are spending. The second issue which is huge in the crypto world is a complete lack of privacy. The whole reason that crypto was created was to provide anonymity and to have a currency that was not centralized and subject to loss of value through inflation etc.

As we see more and more governments getting involved in creating coins, we need to ask the question of why they are doing this. Is it because they foresee the world going more and more towards digital currencies? Or is it because they see the potential for digital currencies to obscure transaction?

I believe (especially in the case of the CCP) the reason they would like to establish the digital currencies as a way to track spending and wealth of their citizens. I can see how this could be easily done as the government would easily be able to look back at the blockchain and see the transaction and they would know exactly who owns which wallet. This in my mind defeats the purpose of crypto.

One thing I do not know of is the ability for people to change their government issued coins for other coins which would offer more privacy but then we get into having to exchange and move coins back and forth and would also allow the government to see what wallets are associated with other wallets. This would allow any government to eventually determine ownership of these digital wallets.

I am not overly concerned that any government would be too interested in my (very small) amounts of crypto but I do believe that there should be some privacy concerns. In America we all file tax returns and the US Govt. likely has access to all of our balances already but by keeping a percentage of our capital in crypto this provides a small level of privacy as it pertains to our networth.

Finally by maintaining a portion of our capital in crypto we are able to engage in commerce privately. This could be for nefarious purposes, or it could be in order to buy a pizza, regardless of what we are doing with our money it should be private.

Thanks for stopping by to read, please comment and let me know if you found this interesting and want more articles like this.