China claims it would protect the privacy of digital yuan users while preventing money laundering.
Mu Changchun, director-general of the Digital Currency Research Institute of the People’s Bank of China (PBoC), has reaffirmed the government’s commitment to preserving digital yuan users’ privacy rights.
Privacy issues have been a topic of conversation among opponents of central bank digital currencies (CBDCs) in general. They have been exacerbated by China’s history and prior transgressions of its people’s privacy. However, it remains unclear how the government plans to enforce privacy safeguards.
Changchun told Security Times, while discussing the nature of the CBDC, that safeguards would be in place to prohibit illegal activities like “money laundering, terrorist funding, and tax evasion” while protecting users’ privacy.
The digital yuan has passed many levels of testing in various Chinese cities, most notably during the Winter Olympics. The pilot programmes and deployment in important cities’ transportation sectors provide proof that the CBDC would work similarly to banknotes and coins.
Three Republican senators in the United States have suggested legislation prohibiting the digital yuan usage in app shops inside the nation’s internet. Senators said that the Chinese Communist Party would utilise its digital money to eavesdrop on anybody who uses it, while the Chinese embassy vehemently denied the charges.
China sees extensive adoption
At the weekend’s Fifth Digital China Summit in Fuzhou, banking institutions revealed a variety of digital yuan-specific goods. China Construction Bank (CCB) showcased a new mobile app for the CBDC, a physical, digital yuan wallet, and a chip card for users to use to settle transactions.
To promote the CBDC, the Agricultural Bank of China (ABC) partnered with grocery franchisees, resulting in significant transaction volumes.
Since then, 37 members have established an association whose primary objective is the development of the digital yuan. The direct members are state-owned financial institutions.