According to a representative of the People’s Bank of China, the Chinese authorities are ready to ensure maximum secrecy of the country’s central bank digital currency, or CBDC.
Mu Changchun, head of the People’s Bank of China Digital Currency Research Institute, talked about options for preserving the renminbi’s privacy at the 2021 China Development Forum on Sunday, local news agency Sina Finance reported.
Mo mentioned that a completely anonymous national digital currency is not possible because the national digital currency must meet the requirements related to money laundering, combating terrorism and tax evasion. However, this does not mean that the Chinese digital yuan lacks privacy, he said.
Mo said the so-called “verifiable anonymity” is a major feature of the Chinese digital yuan, which means that the government provides certain tools to ensure maximum usability and financial security in relation to anti-money laundering measures. He stressed that telecom operators involved in the research and development of the digital yuan are not permitted to disclose users’ personal data and phone numbers to third parties, including the central bank.
Mu explained that third parties, such as e-commerce platforms, also cannot access the personal information of digital RMB users because the customer’s billing information is encrypted in the form of a sub-wallet. In addition, the digital yuan has a wide range of technical capabilities to ensure confidentiality, including anonymity technology, privacy system and internal control management mechanism in accordance with relevant Chinese laws, the executive said.
In order to protect the “reasonable” needs of anonymity, Mu said, the People’s Bank of China (PBoC) also plans to adopt a CBDC design that allows small amounts of digital yuan to be handled anonymously. “The digital yuan adopts an anonymous design in small quantities and allows tracking of large quantities,” he said.
“In short, protecting user privacy in the digital yuan is the highest among current payment instruments,” Mo concluded.
As Cointelegraph previously reported, many global jurisdictions such as the United States have ranked user privacy concerns as one of CBDC’s biggest concerns. According to the European Central Bank’s public advice in the euro, user privacy is the most sought-after feature of the European CBD, followed by European security and coverage coverage.