The digital yuan, a new government electronic currency currently being tested in China, will have an “expiration date” function. If necessary, the government will be able to “turn off” digital yuan after a predetermined date. Thus, the authorities intend to stimulate citizens to spend money during periods of economic downturn.
According to The Wall Street Journal , various “shelf life” options have already been tested. The introduction of such a function will greatly increase the central bank’s ability to control the economy and become a nightmare for people seeking to accumulate savings. The government will be able to stimulate consumption by announcing that on a certain day, part of the digital yuan will become invalid. This will force their owners to quickly spend this currency.
The authorities’ announcement that some of the yuan will become invalid on a certain day will force the owners to spend the currency.
The digital currency will also give the PRC authorities complete control over domestic financial transactions. They will be able to track in detail all transactions carried out by citizens, fine for violations and block the accounts of the guilty ones.