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China’s e-CNY: “controllable currency” will reduce “currency controls”

April 8, 2022 by Rich Turrin

Thank you to Timmy Shen from Forkast.news!

What US Fed’s interest rate hike means for China and its CBDC

Richard Turrin, a Shanghai-based fintech consultant, said that while the e-CNY is still only in use for domestic trials at present, he agrees that in the future any outflows that attempt to take advantage of rate hikes could easily be curtailed by the fact that the digital yuan is a “controllable currency.”

“It is likely that smart contracts could be used with larger value [of] e-CNY international transactions to make it usable at levels that would cause it to be flagged under traditional currency control,” Turrin said, adding that this would allow China to effectively increase foreign usage of the e-CNY as both the recipients and the use for the cash would be known.

From the longer interview:

Standard currency outflows in yuan are subject to currency controls, which both examine and limit the off-shore use of RMB. With e-CNY the concept of “currency control” will be replaced by “controllable currency” in that the use and or recipient can be programmed into the currency. This will allow China to effectively increase foreign usage of RMB in digital form because the recipients and use would be known.

The e-CNY can, in part, eliminate the common complaint that “currency controls” limit yuan use.

 

 

Category: Banking, CBDC, China, Currency, Fintech
Rich Turrin

About Rich Turrin

Rich Turrin is the international best-selling author of “Cashless – China’s Digital Currency Revolution” and “Innovation Lab Excellence.” He is an Onalytica Top 100 Fintech Influencer and an award-winning executive previously heading fintech teams at IBM following a twenty-year career in investment banking. Rich is a leading media commentator and advisor on China’s digital currency and tech scene. Living in Shanghai for more than a decade, Rich experienced China going cashless first-hand.

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