China digital currency: central bank seeks to assure consumers of data, privacy protection
- China’s central bank is trying to allay privacy worries associated with its digital currency by promising ‘controllable anonymity’
- Mobile users fear having to share too much information and private businesses have low trust in the anonymity of payments
China’s central bank is trying to build trust in the data protection measures built into the nation’s sovereign digital currency, something analysts say is crucial for widespread adoption among its citizens.
Mobile users in China are worried about having to share too much personal information when downloading digital wallets, while the private sector has relatively low trust in privacy protection for anonymous payments, even if they are controlled by the central bank, research has found.
It’s important to get the balance right between protection of privacy and reaping efficiency gains
Relatively small transactions using the digital currency would be anonymous “to a reasonable extent”, Mu said at the China Development Forum held at the weekend.
When the digital yuan is used to make a payment, personal information becomes encrypted in an e-wallet before being delivered to an e-commerce platform. As a result, the e-commerce platform will not gain access to the personal information, protecting privacy, Mu said.
Telecoms operators are also involved in the development of the e-yuan, but they are not allowed to disclose customer information from mobile phones to third parties like the central bank under current laws and regulations, Mu said.
However, large suspicious transactions will be traceable to maintain financial security. The PBOC official said complete anonymity was impractical if the e-yuan was to help prevent criminal behaviour such as money laundering, terrorist financing and tax evasion.
