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

Thank you to Timmy Shen from Forkast.news!

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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.