The governor of the People’s Bank of China, Mr.Yi Gang, spoke at the recent Hong Kong Fintech Week and touched on the evolution of the digital yuan, which is the recently launched electronic currency of his nation. He discussed how a national digital currency is being adopted and created. 

The release of digital yuan

China’s digital yuan might replace all other cryptocurrencies after its introduction. In China, where the infrastructure for digital payments is well-established, Mr Yi mentioned that the digital yuan is being promoted as a replacement for cryptocurrencies.

One of the most crucial issues in this context, as for his speech, is the security of customers. He went on to explain a two-tiered system that would give customers achievable anonymity. 

At the initial stage, the state bank has complete control over interagency exchanged data and gives authorized businesses a digital source. At the second level, authorized operators gather the individual information required to offer public trading systems and distribution services.

Mr Yi guaranteed that the info would be kept secret, disidentified, and encrypted. He claims that users will be able to make anonymous transfers up to a certain amount and that special electronic wallets will be made available for these transactions. 

The security measures

A mindful equilibrium must be struck between upholding people’s privateness and fighting illegal actions. A fully anonymous CBDCs can be used for tax nonpayment, and makes it difficult to stop crimes like terrorist financing. According to Mr. Yi, E-CNY is equal to CBDC.

The country’s top priorities are to fulfill home cost requests, boost comprehensive commercial development, and improve the efficiency of its new medium of exchange system.

E-CNY is using a two-tiered strategy to accomplish this, according to the statement. At the first level, the Bank of China will solely be in charge of managing interagency transaction data while also providing authorized operators with electronic CNY. At the second level, authorized agencies will collect the individual info necessitated to offer a trading and distribution platform. 

As a result, they abide by consumer privacy laws and regulations and ensure the security of personal data using up-to-date technology and rigorous controls.