China is testing using backed digital currency. This is maybe not positive. Cryptocurrency has decentralization at its core. It’s a lot harder to manipulate or be used for ill, but a government body having utter minute control of a currency is another matter.
Nothing is stopping a system like this being used to economically blacklist a person out of any buying power or be used for advanced tracking methods. It’s simply not private.
Now, an upside of this is the perception it may reinforce. This is a major country normalizing a digital currency. That can make waves. It can prove viability and makes for a decent stress test on how hardware would handle transactions and logging. It’s a way to see how it affects a local economy.
The future of finance and how organizations and the populace see government and its relationship with money is a hot topic right now. Between stimulus packages, an increasingly e-commerce world, stigmatization of in-person purchases, and the inherent disease vector that is a dollar bill, we could see massive change quickly and near worldwide. If China’s experiment proves fruitful, there’s no way we won’t see other countries try similar strategies.