China Promises More Privacy For Users Of The Digital Yuan
✍️ 27 July, 2022 - 9:32 👤 Editor: Jakub Motyka
- China wants to promote the use of the digital yuan by promising greater privacy
- To this end, it is taking measures to prevent money laundering
- The digital yuan is one of the world's leading central bank digital currencies (CDBCs)
China has promised to protect the privacy of users of the digital yuan, in its quest for mass adoption. Mu Changchun, General Director of the Digital Currency Research Institute of the People's Bank of China, has reiterated his commitment to protect the rights of its users. However, this has raised major concerns among critics of Central Bank Digital Currencies (CBDs).
In the middle of an interview, Changchun assured Security Times that they were developing a new mechanism for China's digital yuan. With it, they seek to prevent their currency from being used for money laundering, financing of terrorism, tax evasion and all kinds of illicit activity. At the same time, they promise to protect the privacy of users.
Is China's Digital Yuan A Cryptocurrency?
The simple answer is no. The digital yuan will work in the same way as banknotes issued by the central bank. They can be exchanged for gold and foreign currencies, just like any e-CNY on the stock market. For this, it will rely on a China Construction Bank (CCB) mobile application similar to a digital wallet, and a chip card. However, your transactions will not be reflected on a blockchain like any cryptocurrency would.
Contrary to what many believe,coins issued by CBDCs have very limited privacy. This completely differs from the main objective of cryptocurrencies, which is to offer a form of free and decentralized exchange. The digital yuan, being dependent on the Central Bank of Digital Currencies, is not a decentralized asset. . Being backed by a monetary institution, it will offer greater stability than cryptocurrencies, at the cost of the freedom that characterizes them.
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