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Beijing is strongly promoting the adoption of the central bank’s digital currency e-CNY through trials and pilot programs
China will fully respect privacy and protect personal data when using the digital yuan, state media quoted a senior central bank official as saying on Sunday, as Beijing pushes for greater adoption of e-CNY.
Limited anonymity is a key feature of the digital yuan, said Mu Changchun, director general of the central bank’s Digital Currency Research Institute, saying it ensures reasonable anonymous transactions.
“On the other hand, it also prevents and combats illegal activities including money laundering, terrorist financing and tax evasion, maintaining the need for financial security,” the Securities Times quoted Mu as saying at the forum.
The People’s Bank of China is pioneering the development and issuance of a central bank digital currency (CBDC), which in the case of e-CNY will be a traceable replacement for banknotes and coins.
Other central banks are focusing on developing CBDCs to modernize their financial systems, fend off competition from cryptocurrencies such as Bitcoin, and speed up domestic and international payments.
China’s efforts are among the most advanced globally, and the country has conducted various trials and pilot schemes of various payment scenarios in recent years.
He also told Mu that e-CNY, which is a digital version of fiat currency issued by the PBOC, can be used to buy anything that can be bought with notes and coins.
“Banknotes and coins can buy gold and transfer foreign currency, just like e-CNY,” he said.
In May, some cities distributed free digital cash to revive consumption and help businesses hit by the pandemic, with more e-CNY applications expected to boost the transparency and efficiency of government policies in the future.