Blockchain for Banking News

China’s digital currency will offer ‘anonymous transactions’

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Today, the People’s Bank of China (PBOC) deputy director Mu Changchun addressed privacy and anonymity concerns over its upcoming digital currency project. According to Reuters, the central bank official said that the digital yuan will have private transactions for those who want them.

At a Singapore conference, he said: “We know the demand from the general public is to keep anonymity by using paper money and coins … we will give those people who demand it anonymity in their transactions.”

Mu leads China’s central bank digital currency (CBDC) initiative and has been one of the key voices in its development. This summer, he made clear the PBOC’s concerns over Facebook’s Libra project. Two months later, Mu released a training course on the digital currency warning people of its possible financial consequences, plus what China is doing to further its CBDC.

In August, Mu claimed the currency was “ready” for launch, but another official confirmed that there was “no timetable” for its issuance. We do know the central bank will do this by distributing the CBDC to consumer-facing firms, which will then issue it to the public. These firms are rumored to include tech giants’ payment apps AliPay and WeChat, along with leading banks.

Most recently, just last week, Mu confirmed that the CBDC would not require a linked bank account. He also said that digital currency issuance is a “horse race” in which “the leader will win the entire market” – explaining his concern about Libra.

Perhaps these international ambitions have led to today’s commentary on privacy. Still in the works, it was unconfirmed whether China would be able to see the details and cash flow of anyone using the CBDC. This caused some concern, particularly among Western countries.

But today Mu appeared to confirm that the currency would mimic cash and offer privacy. Though it’s more likely the CBDC will be pseudonymous, due to regulatory laws.

As Mu added: “But at the same time we will keep the balance between the ‘controllable anonymity’ and anti-money laundering, CTF (counter terrorist financing), and also tax issues, online gambling and any electronic criminal activities.”