China has launched a digital yuan—the first for a major currency. The technology is currently only in trial stage among around 100,000 citizens, but it is envisaged as eventually replacing cash and debit cards, allowing the government to effectively monitor all domestic transactions. The digital yuan could also allow Beijing to play a bigger role in international transfers, but setting up the infrastructure and norms for that is a long way off. One major issue with the digital yuan is that nearly 40 per cent of the Chinese population still isn’t regularly connected to the internet, and the cash economy is still the norm for hundreds of millions of people. It’s not uncommon for a poor family of four to share a single mobile phone, and it’s especially tricky for those who lack official identification, required to purchase a SIM card.
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