China Central Bank Governor Says Digital Yuan Has ‘Managed Anonymity’

People’s Bank of China Governor Yi Gang has reportedly said that the country’s centralized digital yuan (e-CNY) should protect privacy but should not be as anonymous as cash. 

During a virtual speech delivered Monday (Oct. 31) at the Hong Kong FinTech Week conference, Yi said there should be a balance between the desire for privacy and the need to prevent the currency from being used in the commission of fraud, money laundering and other illicit activities, Bloomberg reported. 

“Anonymity and full disclosure are not as simple as black and white,” Yi said. 

Data on transactions would be secured, encrypted and stored; sensitive consumer information would not be identifiable to people not involved with the transaction, and legal authorization would be required for anyone who does ask for that data, Yi said. 

“In designing e-CNY, we try to ensure privacy protection and financial security through, by and large, anonymity and managed anonymity,” Yi said, per the report. 

As of mid-October, Chinese citizens have spent more than $14 billion worth of digital yuan, according to the People’s Bank of China. 

That total represented 360 million transactions made at some 5.6 million merchants in 15 provinces that now support the central bank digital currency (CBDC), the release stated. 

As PYMNTS reported Wednesday (Oct. 26), China is far ahead of other major developed countries in developing a CBDC, having started in 2014. However, its testing and rollout campaign has been slow, partly to provide time for merchants to prepare for it and partly to convince consumers to use it instead of more familiar payment methods. 

China has also worked to overcome widespread concerns that the digital yuan would be used to track people’s spending minutely. 

As PYMNTS reported Aug. 24, Chinese authorities are introducing the digital yuan in a smart way: slow, steady, incremental and targeting types of payments that will get the widest assortment of people using the CBDC.