According to an official at the People’s Bank of China, Chinese officials are keen to ensure maximum user privacy for the country’s central bank digital currency (digital yuan).
The privacy capabilities of the digital yuan stand out
Mu Changchun, head of the People’s Bank of China’s digital currency research institute, talked about China’s digital yuan privacy capabilities at the 2021 China Development Forum on Sunday, local news agency Sina Finance reported.
Mu said that a fully anonymous CBDC is “not viable” as a national digital currency must meet the requirements for Money Laundering, Anti-Terrorism Financing and tax evasion. But that doesn’t mean that China’s digital yuan lacks user privacy, he assured.
What is controllable anonymity?
Mu said the “controllable anonymity” approach is a key feature of China’s digital yuan, meaning that the government provides specific tools to ensure maximum user privacy and financial security in conjunction with AML measures. He emphasized that telecom operators involved in the research and development of the digital yuan are not allowed to disclose personal data and phone numbers of users to third parties, including the central bank.
Mu explained that third parties, like e-commerce platforms, cannot access the personal data of digital yuan users because customer payment information is encrypted in the form of a sub-wallet. The manager also stated that the digital yuan has numerous technical capabilities to ensure confidentiality, including identity anonymization technology and personal data protection system and internal control management mechanism in accordance with relevant Chinese laws.
Confidentiality request will be fulfilled
To protect the “reasonable” anonymity needs, PBoC plans to adopt a CBDC design that enables anonymous digital yuan transactions in small quantities, Mu claims. “Digital renminbi adopts an anonymous design in small quantities, keeping large quantities traceable.” said.
“In short, protecting user privacy with digital renminbi is the highest among the available payment tools,” Mu said. he completed his words.
Many global jurisdictions, such as the United States, view user privacy issues as one of the CBDC’s biggest problems. User privacy is the most requested feature for a European CBDC, followed by European access with security, according to the European Central Bank’s digital euro public consultation.