Monday, March 23, 2020

The China That Emerges After Coronavirus Will Be A Cashless Society

Freezing cross-province transfers and replacing $86 billion in paper yuan is only consolidating a process of surveillance where Beijing can monitor all transactions.
It’s still getting bad in China, where reported coronavirus cases are doubling every 7-10 days. Until that exponential contagion curve flattens out, we just don’t know how far the outbreak spreads or how fast the government will ultimately be able to contain it.
The society that emerges is going to play by different rules. And it starts with Beijing locking down even more of the second-biggest economy in history. 
Cash was already going away in China. Now it turns out that the virus shows up on old paper money and can live there for days.
Every time every one of those infected yuan notes moves from hand to hand, it’s another infection vector. If you handle the wrong money, you’re literally carrying the plague.
Naturally that makes people much less eager to accept cash. Luckily there are payment apps to keep everything clean and digital.
But coincidentally enough, the big apps from Alibaba and We Chat already work hand in glove with the central bank. There’s no privacy there. The transactions are open to surveillance.
And with true crypto driven deep underground, cash was the best way left to operate in the country without leaving a transparent digital trail. 
Is it any wonder Beijing has started impounding yuan notes in the quarantine zone while stopping transfers between provinces? 
Old currency just isn’t getting replaced. Instead it’s being withdrawn from circulation so it can be sterilized. In theory, new money will take its place.

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