HRF’s Weekly Financial Freedom Report #25

Hong Kong | Deploys Pilot for Digital Yuan CBDC

Hong Kong officials deployed a pilot program for China’s tightly controlled digital yuan (e-CNY) central bank digital currency (CBDC), marking its first expansion outside the mainland. Despite China’s push for CBDCs, privacy concerns and a lack of trust have led many Chinese workers to hastily exchange their e-CNY for traditional currency as soon as they are paid in the CBDCs. While only a small minority of Chinese citizens have actually opted to use CBDCs, interest in open-source financial solutions is thriving. This was exemplified by the strong attendance at the recent Bitcoin Asia conference, where more than half the attendees arrived from mainland China to learn more about financial freedom through Bitcoin.

Nigeria | Financial Institutions Require Customer Social Media Handles

In a draconian new verdict, the Federal High Court of Lagos upheld a Central Bank of Nigeria (CBN) regulation requiring financial institutions to collect customers’ social media handles as part of their Know-Your-Customer (KYC) procedures. Justice Nnamdi Dimgba argued this new regulation doesn’t breach citizens’ privacy rights, likening it to collecting email addresses and phone numbers for verification. This verdict triggers concerns over increased surveillance and the potential targeting and harassment based on an individual’s online activity. With Nigeria’s central bank’s digital currency, the e-naira, already in public use, this new verdict could lead to more Nigerians being debanked and their funds frozen based on their online speech, further restricting the little freedoms they have today.

Zimbabwe | Currency Enforcement Leads to Frozen Bank Accounts

In Zimbabwe, President Emmerson Mnangagwa’s aggressive enforcement of the newly launched ZiG (Zimbabwe Gold) currency led to the arrests of 224 money changers and the freezing of 90 bank accounts. This comes in response to adoption difficulties faced since launching the ZiG currency last month. Public distrust in ZiG forced merchants to conduct business in US dollars, while the black market exchange rate climbed to nearly double the official rate. While the regime views money changers as threatening economic recovery and stability, these individuals provide vital services to Zimbabweans constricted by an unstable currency and offer access to more stable currencies, such as the USD. They help preserve a sense of financial freedom for citizens caught in a failed and fabricated economic environment.

Pakistan | Protests Over Rising Prices Turn Violent

Grappling with an acute economic crisis and the highest cost of living in Asia, residents of Pakistan-held Kashmir took to the streets to protest their frustration over the rising costs of food, fuel, and utility bills. In response, officials agreed to lower the price of electricity and wheat, leading to rallies being called off, but not before the demonstrations turned violent. These protests symbolize Pakistanis’ discontent with the social and financial instability brought about by a corrupt, partly authoritarian regime. Sadly, Pakistan’s financial fate will likely worsen with the country seeking at least $6 billion from the International Monetary Fund (IMF) later this year. With the regime already burdened with allocating half its budget to servicing its debt, the loan will require major structural reforms that will undemocratically further deplete the power of Pakistani wages and currency.

Cambodia | Opposition Leader Charged for Criticizing Ruling Regime

In Cambodia, the ruling regime charged the leader of a recently formed opposition party, the Nation Power Party, Sun Chanthy, with inciting social disorder. The regime is threatening Chanthy with a potential two-year prison sentence simply for criticizing the government. This is the third legal action taken against critics of Prime Minister Hun Manet’s government this month, stressing the routine practice of using the judicial system to oppress political opposition leaders. The regime’s repressive practices against dissent, coupled with a central bank digital currency (CBDC) launched in 2020, may further strengthen the regime’s authoritarian control and add to a long history of human rights abuses.