The state-run Xinhua News agency reported last week that 2,421 people found guilty of bank card and mobile SIM card-related crimes in the southern Guangdong province over the past month have been barred from making mobile and card payments for five years. They will now only be able to use cashMoney in physical form such as banknotes and coins. More.
The same 5 year-ban from digital payments was issued to 1,652 people in Haikou, the capital of the Hainan province as the People’s Bank of China launched a special campaign to severely crack down on illegal and criminal activities including the sale, renting and lending of bank cards or mobile accounts.
This is not the first time China is using paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More bans to sanction wrongdoers. In 2019, the Associated Press reported that millions of people were prevented from travelling for ‘social credit’ offenses. Tens of millions of offenders were blocked from buying plane and train tickets for “social credit” offenses including unpaid taxes and fines under a controversial system the ruling Communist Party says will improve public behaviour. Others were blocked from leaving China due to unpaid taxes.
For Kenrick Davis from Sixth Tone, “The punishment is tantamount to social exclusion in a country where mobile payments are employed in every area of life, from public transport to grocery shopping, household bills, health care, and tourism. Leading payment apps Alipay and WeChat are so dominant that the government has had to remind businesses that refusing cash is illegal.”
Alipay and WeChat Pay account for the majority of mobile payments transactions in China. Alipay’s share of mobile payments has increased, rising to 55.1% in the fourth quarter of 2019, according to research consultant iResearch. Tencent had 38.9% of the market. In November, the parent company, of Alipay, the Ant Group was set to raise $37 billion in what would have been the world’s largest IPO before it was halted by the Chinese authorities. The Chinese antitrust agency has been investigating Alipay and WeChat Pay on suspicions of breaching anti-trust rules according to Reuters.
While no launch dateThe year in which a medal or coin was minted. On a banknote, the date is usually the year in which the issuance of that banknote - not its printing or entering into circulation - was formally authorised. More has been set yet, the People’s Bank of China will likely to be the first major central bank to issue a digital currencyThe money used in a particular country at a particular time, like dollar, yen, euro, etc., consisting of banknotes and coins, that does not require endorsement as a medium of exchange. More, seeking to keep up with – and control of – a rapidly digitising economy. The draft Banking Law adopted in October 2020 has given the digital currency legal recognition. It stipulates that digital RMB will be treated on par with physical RMB, or cash. It clarifies that digital RMB is legal tenderMoney that is legally valid for the payment of debts and must be accepted for that purpose when offered. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered (“tendered”) in payment of a debt extinguishes the debt. There is no obligation on the creditor to accept the tendered payment, but the act of tendering the payment in legal tender discharges the debt. More, laying the foundation for its wider issuance.
Human rights activists argue “social credit” is too rigid and might unfairly label people as untrustworthy without telling them they have lost status or how to restore it. For Alex Gladstein, Chief Strategy Officer at the Human Rights Foundation, the central bank digital currency would enable the government to have real-time direct access to people’s data, without using intermediaries such as WeChat or AliPay. This is the dystopic reality envisioned by Orwell.