An official from the Chinese central bank, People’s Bank of China (PBoC), has said a “completely anonymous central bank digital currency (CBDC) is not an option” based on international consensus. Mu Changchun, the head of the PBoCs Digital Currency Research Institute, said in a forum on Saturday that the so-called “controllable anonymity” is at the core of China’s digital yuan design.
Digital as a high-level financial surveillance tool.
The PBoC openly confirmed and elaborated at length the use of digital yuan not only as a payment method but also as a high-level financial surveillance tool. “The precondition of CBDC’s anonymity is it being risk-controllable and limited. A fully anonymous CBDC is not practical,” Mu said. He added that controllable anonymity is also based on international consensus. “Any design that doesn’t satisfy anti-money laundering, anti-terrorism financing, and anti-tax evasion purposes will be vetoed,” he said. It was previously feared that the Chinese government might use digital yuan as a surveillance tool by many in the crypto community.
China leads the race of issuing a CBDC.
The People’s Bank of China has been working on its digital currency for almost seven years and is now close to issuing it to the general public. According to the PoBC official, the digital yuan’s controllable anonymity feature means privacy only applies to end-users when they transact among themselves while the details of those transactions remain visible to the central bank and regulators. China has already successfully completed several pilot projects to give away digital yuan to the general public in different major cities, including Beijing. Several other countries are also actively exploring CBDC options. As reported earlier, the Bank of Japan is planning to work on its digital currency later this year.