PBOC Official Vows to Protect User Privacy in Digital Yuan Push

(Bloomberg) --

Most Read from Bloomberg

• Sergey Brin Ordered Sale of Musk Investments After Affair: WSJ

• VW Billionaire Clan Plotted CEO Ouster as He Was on US Trip

• Who Is Nicole Shanahan, Woman at Center of Musk-Brin Drama?

• Fed to Inflict More Pain on Economy as It Readies Big Rate Hike

• China’s Property Crisis Burns Middle Class Stuck With Huge Loans

China will protect data related to the use of digital yuan, its central bank’s head of digital currency unit says, as the country moves forward with tests of the currency also known as e-CNY.

Only a limited amount of personal information is collected when people use digital yuan, and access to it will be restricted, Mu Changchun, head of the Digital Currency Institute at the People’s Bank of China, said at a forum in Fujian, China, on Sunday.

For normal transactions and purchases, neither the PBOC nor the platforms that operate and convert digital currency will be able to get all the information about the trading, Mu said. Authorities should only ask to use the data when it’s necessary to investigate transactions that are suspected of violating laws, he said.

Mu reiterated that the digital yuan has the highest level of privacy protection among existing digital payment tools. Still, he said it’s not proper for digital currency to be as anonymous as cash, since that would facilitate money laundering and other illegal behaviors.

The highlights of Mu’s speech include:

• “Isolation” mechanism and use restrictions should be created to regulate use of client data

• Operators of digital currency platforms should set up an internal system to protect client data and monitor relevant work

• Only some authorities should be allowed to look into or freeze people’s e-Wallets or transfer money out of them based on legal reasons; operators otherwise should have the right to refuse requests

• Regulators need to penalize non-compliant use of data

• China should study and roll out legal regulations in due time to fight money laundering and terrorism financing using digital yuan

Most Read from Bloomberg Businessweek

• The $260 Swatch-Omega MoonSwatch Is Reviving the Budget Brand

• Postmortem Sperm Retrieval Is Turning Dead Men Into Fathers

• The US Has Lost Its Way on Computer Chips

• Ghosts of 2012 Haunt Europe as Rate Hikes Begin

• Sam Bankman-Fried Turns $2 Trillion Crypto Rout Into Buying Opportunity

©2022 Bloomberg L.P.