The “People’s Bank of China” (PBOC) announced that in three provinces, a new regulatory pilot program will be introduced. The program should aim to limit the size of non-registered cash transactions.
Parallel to this, the Chinese government is preparing for the introduction of a digital national currency. Originally, the story of the “Xinhua News Agency reported,” widely used it has), but thanks to the prominent crypto-expert Dovey Wan (@DoveyWan.
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PBOC: New rules for two years in force
Apparently the test program is started in the provinces of Hebei, Zhejiang, and Shenzhen, and will take two years. During this time, there are limits to how much money without a “register” paid up or can be lifted. For business accounts, the limit is 500,000 RMB (approximately 71.000 $). For private accounts, it is, apparently, between 100,000 and 300,000 RMB (about $ 15,000 – $60,000 to).
All of this is in the context of the recent announcement that the PBOC will shortly issue a national digital currency (Coin-Update.de reported). Against this Background, it is quite possible that the recent restriction could be an early step in the elimination of all future cash transactions.
Of course, the regulatory program is sold under the guise of crime-fighting:
3/ however knowing banks are already pretty good in dealing with money laundering (enough surveillance in place if they really want to act on it) and how the whole financial system is largely cashless already, the regulation to me may so design to manage future bank run lol— Dovey 以德服人 Wan 🗝 🦖 (@DoveyWan) 14. November 2019
China is not the first country, the cash limited
The rules for the limitation of cash transactions, however, are neither shocking nor particularly surprising. China is not the first Nation to take appropriate measures. Countries such as Australia and Argentina have also begun to limit cash transactions above a certain amount or to regulate. As in the Twitter Thread of Wan mentioned: the EU is already a restriction of cash transactions over 10,000 euros.
I’m surprised this hasn’t been in place already. In the EU, the restriction is for cash transactions above €10k.— Crypto Joseph (@Crypto-Joseph) 14. November 2019
Data protection officer complaining of such steps usually, because they are often viewed as a step away from individual freedom and towards full government control. Nevertheless, the PBOC has promised that its upcoming digital currency allows for a certain anonymity, which, however, was taken with skepticism.
Ultimately, only time will show how money restrictions have an impact on Chinese citizens (and the Bitcoin rate…) – not to mention what will happen in the next two years and beyond. If there are no problems, is likely to expand the program further.
Other Nations could then try to adopt similar guidelines. Whether Unger crypto the applicable currencies, such as Bitcoin, in a stricter environment or eliminated to thrive, also remains to be seen.