The People’s Bank of China (PBOC) revealed that a new regulatory pilot program will be rolled out in three provinces seeking to limit the size of unregistered cash transactions allowed in the nation. This comes as the Chinese government is preparing to release an all-digital national currency.
The story was originally reported by the Xinhua News Agency, but spread quickly through Twitter thanks to prominent cryptocurrency personality, Dovey Wan (@DoveyWan):
1/ Three provinces Hebei, Zhejiang and Shenzhen will be on this trial for 2 years.
For business accounts, any deposit/withdrawal > 500K rmb (~$71K) must be **registered**
The cap for a personal account will be ranging from 100k rmb to 300k rmb ($15k to $60k)
— Dovey 以德服人 Wan 🪐🦖 (@DoveyWan) November 14, 2019
PBOC New Regulations Put in Place for Two Years
It appears the test program will be launched in the Hebei, Zhejiang and Shenzhen provinces and will last for two years. During this time there will be caps on how much cash can be deposited or withdrawn without the transaction being “registered.” For business accounts, this limit will be 500,000 RMB (about $71,000), and for personal accounts it will apparently be between 100,000 to 300,000 RMB ($15,000 – $60,000).
All of this comes in the wake of the recent announcement that the PBOC will soon be issuing a national digital currency, as BeInCrypto has previously reported. In light of this, it is entirely possible that this could be an early step towards removing all cash transactions in the future. Of course, the regulatory program is actually being sold under the guise of deterring crime:
3/ however knowing banks are already pretty good in dealing with money laundering (enough surveillance in place if they really want to act on it) and how the whole financial system is largely cashless already, the regulation to me may also design to manage future bank run lol
— Dovey 以德服人 Wan 🪐🦖 (@DoveyWan) November 14, 2019
China Isn’t the First to Limit Cash
These regulations are not particularly shocking given that China isn’t even the first nation to take such measures. Already, nations such as Australia and Argentina have begun limiting or regulating cash transactions above a certain amount. As is even pointed out in Wan’s Twitter thread, the EU already enforces a restriction on movements of cash over €10,000.
I’m surprised this hasn’t been in place already. In EU, the restriction is for cash transactions above €10k.
— StackSatsJoseph (@SatsJoseph) November 14, 2019
It is not uncommon for privacy advocates to lament moves such as these, as it is often seen as a step away from individual freedom and towards full government control. Despite this, the PBOC has promised that its upcoming digital currency will allow for a degree of anonymity, though this has been met with skepticism.
Ultimately time will tell how cash restrictions will affect Chinese citizens, not to mention what will happen after the next two years. If there are no problems, it is plausible that the program will continue to expand, and other nations may seek to enact similar policies. Whether unregulated cryptocurrencies will thrive in a stricter environment or be eliminated by it, also remains to be seen.
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