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China Provides Worrying Insight into the Potential Future of National “Cryptocurrencies”

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China Provides Worrying Insight into the Potential Future of National “Cryptocurrencies”

Sometimes, life truly does imitate art, just like Oscar Wilde opined. In something that is eerily straight out of the hit Netflix show, Black Mirror, China is set to ban citizens with bad social credit scores from airplanes, trains and other forms of public transportation for up to a year. Something of the sort happened in the third season of the TV Show mentioned above on the episode titled “Nosedive.”

“Once Untrustworthy, Always Restricted”

President Xi Jinping is a huge proponent of the Social Credit System which is expected to be fully implemented by the year 2020. The underlying principle of the plan is encapsulated by the phrase, “once untrustworthy, always restricted.” In a notice signed by eight ministries, the aviation regulators, and the Supreme People’s Court, the move was described as being in line with the country’s social credit goals.

The plan essentially bans people with low social credit scores from being able to access to public transportation systems like airplanes and trains. These restrictions would apply to people who have committed acts that constitute a bad social credit score. These sorts of acts include disseminating false information about terrorism, causing a ruckus in a plane or train. Others include using expired tickets, smoking in trains, and a host of other financial and social behaviors that have been deemed inappropriate. This was made known via a couple of announcements made by the Chinese National Development and Reform Commission.

The plan is expected to come into effect by May 1, 2018, but there are already indications that at least a version of the plan has been in operation for a couple of years prior. According to a December 2017 article that appeared on Human Rights Watch, some Chinese citizens have been denied access to air travel due to some alleged improper social conduct. The article recounted the experiences of lawyers, journalists, and political activists who have been blacklisted from having access to air travel, trains, and other forms of transportation.

China’s “Orwellian Approach” to Public Surveillance

The move surely aligns with the country’s “Orwellian approach” to public surveillance as. There are an estimated 170 million surveillance cameras in China, and it is reported that 400 million additional surveillance cameras will be added in the near future. Apart from video surveillance, the government is also keen on biometric information. A 2017 report on CNN, showed that China has arguably the largest collection of citizen’s biometric data. Law enforcement agents in China also have access to state-of-the-art advanced optics hardware with real-time facial recognition capabilities.

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These extreme surveillance measures and the strict censorship laws have made many commentators to label the Chinese society as “dystopian.” Popular social media platforms like Facebook, YouTube, etc. are heavily censored and sometimes even blocked in China. Many Western commentators have often condemned the level of restriction imposed on Chinese citizens by their government. However, like every story, there is another side as the government for their part strongly refutes the negative tinge being used to describe its policies. To them, it is the price that must be paid to ensure a safe and optimally functioning social construct.

A State-owned Digital Currency

There have been numerous reports that the Chinese government is looking to develop a state-owned digital currency. The country’s central bank has reportedly been researching ways by which it can issue a sovereign digital currency. The move comes even as the country continues to come down hard on cryptocurrency trading operations within the nation. After banning ICOs and cryptocurrency exchange platforms, the economic powerhouse has gone the extra mile to plug any loopholes that can be used to access the crypto market within the country.

There is a school of thought that believes that the country’s hard stance is a means of eradicating any foreign crypto competitors from its shores so as to pave the way for its own digital currency. The implications of such a move in a country known for its penchant for strict social control are profound, to say the least. At the risk of sounding like heralds of doom, a digital currency system will allow the government and the central bank to increase their ability to follow the flow of money inside the country. Imagine a country with so much video surveillance now having the ability to monitor the finances of citizens? You can be sure that privacy features in any Chinese digital currency system will be minimal at best.

A state-owned digital currency for the Chinese people might be the final piece of the total social control puzzle that the government has been trying to create. If the country follows this path of development, bitcoin will be in even greater demand, as the entire purpose of the cryptocurrency is to provide a permissionless system for finance; one which would become increasingly utilized if a national cryptocurrency was to be wielded as a weapon to prevent citizens from accessing certain services.

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