Authorities can inquire about and use users’ personal information in accordance with the law in the event of suspicious transactions, People’s Bank of China officials said in response to questions about the privacy of the digital yuan on Sunday.
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Fast facts
- Digital yuan can only provide limited anonymity due to anti-money laundering and anti-terrorist financing requirements, said Mu Changchun, the director of the central bank’s Digital Currency Institute.
- Since last November, Chinese police have started tracking the flow of digital yuan to crack money laundering and fraud cases in Inner Mongolia, Jiangsu, and Henan.
- China currently has no specific law for digital yuan, and Mu said China needs to establish laws to clarify the conditions for digital yuan information inquiry, wallet freezing and deduction, and the penalties for illegal access to digital yuan information.
- Mu says the digital yuan should be anonymous to merchants and third parties not authorized by law.
- China’s CBDC, digital yuan or e-CNY, is now piloting in 23 Chinese cities and the transaction volume topped 83 billion yuan (about US$12.3 billion) in the first half year of 2022.
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