China has seen more fraud cases related to digital yuan across the country, with this month the police in the eastern province of Jiangsu busting another case involving the country’s new digital currency — the e-CNY.
Police in Gaoyou, a county-level city under the administration of Yangzhou city in Jiangsu, earlier this month received a report from a victim who said she was scammed, local media Modern Express reported Monday. She said that she received a call from a suspect who claimed the victim was engaged in a fraud case and asked her for personal bank account information and related verification codes.
With the obtained personal data, the fraudsters then set up an e-CNY digital wallet under the name of the victim and topped up the wallet with over 300,000 yuan (US$47,000) from her bank account. The money was then transferred to the suspect’s own digital yuan wallet.
During the investigation, the local police found the money flowed to a specific digital wallet belonging to a suspect surnamed Li in the eastern province of Shandong. Li was subsequently detained on suspicion of facilitating money laundering through e-CNY for a fraud ring based overseas. The police have seized about 60,000 yuan (US$9,400) that Li allegedly gained illegally.
This is not the first money laundering case related to the digital yuan in China. Earlier this month, police in Xinmi, a county-level city in central China’s Henan province, also busted a tele-fraud case with e-CNY involved.
China is pioneering the world’s first major central bank digital currency. The e-CNY, alternately called the digital renminbi or e-RMB, is issued by the People’s Bank of China (PBOC). Many expect the digital currency to be formally launched in time for the Beijing Winter Olympics in February.
In a white paper released in July, the PBOC noted the e-CNY is not a 100% anonymous system, but supports “managed anonymity” with tiers of complexity based on know-your-customer needs.
The PBOC wrote in the white paper: “It is necessary to guard against the misuse of e-CNY in illegal and criminal activities, such as tele-fraud, internet gambling, money laundering, and tax evasion by making sure that transactions comply with [anti-money laundering/combating of financing of terrorism] requirements.”
China has actively carried out trials for the digital yuan across China. For example, Qingdao, a coastal city in Northeast China’s Shandong province, this month launched a new batch of e-CNY red packets to be used for its metro system. Residents who signed up can receive e-CNY coupons worth 50 yuan (US$7.83).
The country has issued at least 20 rounds of e-CNY red packets across various cities to expand trial adoption, according to Forkast.News’ calculation based on publicly available information.