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China Reiterates Its Opposition to Cryptocurrency

Libertad Monetaria, El American

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We already know that the political-economic policy of China is far from having a free market economy, where negative and natural property rights are respected.

But this does not mean that we should refrain from insisting on certain reaffirmations of the Chinese Communist Party (yes, I insist on alluding to the party, since it acts as a “single party” and is over-represented, beyond the Judicial, Executive and Legislative powers).

This is effectively drastic repression of the monetary freedom one feels when escaping from the scourge of fiat currency and central banking.

A violation of private property

The China National Internet Finance Association, the China Banking Association, and the China Payments and Transparency Association issued, issued a statement last Tuesday prohibiting transactions with decentralized cryptocurrencies (nothing to do with their aspiration of the “digital yuan”) as well as the so-called Initial Coin Offering (ICO), which are, explaining it amenably, calls for backing of new cryptos by investors who would back them in exchange for a specific amount of money.

These calls, which are really initial offerings, are similar to company launches on stock exchanges by means of a “public announcement”. Depending on the final cash value accumulated, it could be considered whether to keep these new projects afloat (token purchases define a value, subjectively and spontaneously).

According to these institutions, there would be a “worrying volatility” that would be encouraging “speculation” (indeed, perhaps the phenomena of fiscal plundering and artificial creation of money by inflationary central banking should be interpreted as such). Hence, here is the “pretext.”

Private property and individual freedom

According to the 2020 edition of the Index of Economic Freedom prepared by The Heritage Foundation, the levels of financial freedom and investment are eminently low (in fact, on average, there would have been a drop with respect to the previous evaluation exercise), with indicators typical of a repressive regime.

These levels are much lower than at the beginning of the century (in 2000). And yes, to clarify, these indicators measure the impact of state regulation on financial services, the facilities for the development and generation of market capital, and the degree of intervention in banking and certain firms in these sectors.

In fact, it can be seen that investments have more stable and quasi-constant levels in the last ten years than about twenty years ago, according to Mihai Macovei in an article for the Mises Institute. In this text, he stresses the need to considerably reduce bureaucratic pressure.

A form of the “digital yuan” would come as no surprise

It would not make much sense for a totalitarian regime, which does not favor freedom of enterprise either, but rather the allied control of companies and citizen monitoring, to give free rein to technology with a highly distributed and decentralized paradigm.

The digitalization of the means of exchange of central banks will facilitate the control of movements and activities of society (individuals, families, communities, companies) by modern states. Incidentally, we see here an umpteenth opportunity for the rise of Big Data (a greater volume of data to be processed).

The currency of China’s tyranny would have greater sophistication in terms of Artificial Intelligence. We are talking about a digital wallet that will record all the user’s biometric information, which is indispensable for any economic operation. The company in charge of this will be Chutian Dragon (in collaboration with IDEX Biometrics), a state-owned company that focuses part of its activities on the manufacture of smart cards.

It is expected to be ready by the time of the 2022 Winter Olympics. China is there threatening the freedom of savings and movement of capital, as well as reinforcing invasions of privacy. Given its sophistication in Big Data and Artificial Intelligence, it is likely a method of increasing the repression of the communist regime.

Ángel Manuel García Carmona

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