China has been making headlines with its CBDC recently. The digital Yuan has received wide usage compared to other CBDCs globally.
Meanwhile, the country has vowed to safeguard the privacy of those using the digital Yuan. This is due to recent criticisms from analysts.
China To Prevent Illicit Usage Of The Digital Yuan
According to the DG of the Digital Currency Research Institute at the PBoC, Mu Changchun, the authority is committed to safeguarding the right of its users.
Several analysts and international executives have raised concerns about the CBDC. Many have stated that the country plans to use it to monitor its citizens. This is due to past privacy violations by the government.
However, the digital Yuan does not guarantee limitless anonymity. Therefore, it is uncertain how the state will safeguard users’ privacy.
According to Changchun, the country would put infrastructures in place to prevent illicit activities with the CBDC. These activities include tax evasions, money laundering, and terrorist financing.
Over the months, China has conducted pilot tests for the electronic Yuan in different cities. It was even introduced during the Beijing Winter Olympics.
Also, the CBDC has been deployed for use in the transportation sector of major cities. According to the country’s central bank, the digital Yuan will operate like coins and banknotes.
“People can use coins and banknotes to buy gold and even concert to foreign currency. The e-CNY can perform this function too,” said Changchun.
US Senators Against China’s Digital Yuan
Meanwhile, three United States senators proposed a bill earlier to halt the usage of the e-CNY in application stores in the country. They claimed the CCP (Chinese Communist Party) wants to use the CBDC to spy on its users.
However, China has denied the allegations labeling them false. The United States has always been skeptical about e-CNY. They had also voiced complaints when China introduced the e-CNY at the 2021 Beijing Olympics.
Last week, China held its 5th Digital Summit in Fuzhou. At the summit, financial firms released several products made specifically for the country’s CBDC, e-CNY.
One example is the mobile app that the CCB (China Construction Bank) developed for the digital Yuan. Others include a microchip card for users to carry out transactions and a digital wallet for the CBDC.
Also, the ABC (Agricultural Bank of China) collaborated with supermarket companies to expand the usage of the CBDC. Also, the partnership aimed to increase the transaction volume of the e-CNY.
Furthermore, the country created a committee of 36 members. Most of the members are state-owned banks. Its main purpose is to promote the usage of the electronic Yuan.