The People’s Bank of China (PBoC) is planning new measures to crack down on illegal gambling in the mainland. It will introduce a new Digital Currency Electronic Payment (DCEP), introducing a state-backed digital currency. The crypto coin will help the central bank monitor tax evasion, terrorist funding, and other cybercrimes.
DCEP to end illegal gambling
The new digital currency will be issued by the central bank and will be based on a blockchain-powered system. Local news outlets suggest that the crypto coin will be helpful in cracking down on digital financial crimes. However, little is known about the coin. Experts suggest that the government will be able to segregate legal funds from suspicious payments in this system. It will also help locate how money flows in the illegal gambling scene in the mainland and abroad.
According to Mu Changchun, the head of PBoC’s Digital Currency Research Institute, a cryptocurrency could provide “controllable anonymity” to the users. He said that users could derive many benefits from the anonymity of cryptocurrencies, but the authorities would like to investigate unlawful activities. “We know the demand from the general public is to keep anonymity by using paper money and coins … we will give those people who demand it anonymity in their transactions,” he added.
The criminal side of gambling
China is interested in digital currencies that could be used for gambling like Bitcoin and TRON. Cryptos and illegal are closely tied in China due to their inherent anonymity. Last year, the cyber police unveiled a $1.5 billion crypto scheme that allowed illegal World Cup betting.
According to some estimates, about 12.7% of all unlawful activities online are related to gambling. The Chinese authorities are against any gambling altogether and allow it only in Macau. They disconnect the mainland from gambling websites alongside other unauthorized websites.
However, China’s digital oversight will not stop at identifying and punishing individuals who are running illegal gambling operations in the country. It has developed a new ‘social score’ system that could impose penalties on people who indulge in gambling.
According to Darin Oliver, CEO of Blockdraw, crypto gambling has a huge scope in China. Blockchains can easily evolve to accommodate this industry while staying in the purview of Chinese authorities. Given Beijing’s strongly negative outlook on gambling, it is unclear if blockchain gambling will ever be a reality here.