China’s central bank mulls issuing digital currency

Published on ASIA TIMES, by ASIA UNHEDGED China, Jan 21, 2016.

The People’s Bank of China BPOC on Wednesday said it wants to issue its own digital currency to cut the costs of circulating traditional paper money, boost policymakers’ control of money supply and improve the efficiency of global transactions.

The central bank set up a research team in 2014 to study digital currencies and application scenarios, according to a statement posted on the regulator’s website.  

The PBOC said it consulted with teams from Citigroup and Deloitte, though it didn’t specify what technology it would be using to issue its digital currency or how it would work in relation to the yuan … //

… ZeroHedge concludes: The big problem with this thinking is that capital — which begins its life as savings — is the foundation of capitalism. If you attack savings as a scourge, you are attacking capitalism and upward mobility, for only those who save capital can invest it to build wealth. By attacking cash, the central banks and governments are attacking capital and upward mobility.

The benefits to banks and governments by eliminating cash are self-evident:

  • 1. Every financial transaction can be taxed.
  • 2. Every financial transaction can be charged a fee.
  • 3. Bank runs are eliminated.

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