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Andy Mukherjee

China's Crypto Is All About Tracing — and Power

Beijing will come out of the coronavirus crisis with a big first-mover advantage in official digital currency.

China leaps ahead of the competition.

China leaps ahead of the competition.

Source: Chesnot/Getty

The coronavirus has disrupted the world in very large ways. While that battle has been waged, however, another event has almost been missed: the birth of a new kind of fiat currency, which could forever reshape the relationship between money, economic power and geopolitical clout. 

An official Chinese digital yuan, more than five years in the making, is now in pilot runs to slowly start replacing the physical legal tender. If the experiment succeeds, this new cash, valued the same as the familiar banknotes bearing Mao Zedong’s image, will become the world’s first sovereign token to reside exclusively in the ether.