Adoption of Digital Yuan Grows amid Privacy Concerns

UTC by Babafemi Adebajo · 2 min read
Adoption of Digital Yuan Grows amid Privacy Concerns
Photo: Depositphotos

At the 5th Digital China Summit in Fuzhou, several financial institutions unveiled e-CNY-powered products.

The adoption of the digital yuan continues to grow despite worries that China will use it to violate the privacy rights of its citizens. Reuters reported that on Sunday, the Director-General of the Digital Currency Research Institute of the People’s Bank of China (PBoC), Mu Changchun refuted all such claims. Mu then went on to encourage greater adoption of the CBDC.

Earlier in May, three US Senators drafted a bill banning the use of the digital yuan by American app stores. Senator Cotton, one of the senators who introduced the bill, alleged that China plans to use the e-CNY to control and spy on its users. Mu affirmed the Chinese government will protect the rights of all yuan users.

“China will fully respect privacy and protect personal information in using the digital yuan,” he stated. Thereafter, Mu stated that the digital yuan, by design, offered some degree of anonymity. However, Mu noted that the platform will help prevent illegal activities like money laundering, tax evasion, terrorist financing, etc.

Adoption of Digital Yuan Spurred by New Products

Despite the privacy concerns, more people seem to be getting drawn in by its products. In May, more Chines cities adopted the digital yuan for utility. China also used the digital yuan to stimulate the economy. While a city like Shenzhen handed out 30 million yuan as a gift, Xiong’an New Area distributed 50 million yuan. Since then, more institutions have created products around the digital yuan.

As a matter of fact, at the 5th Digital China Summit in Fuzhou, several financial institutions unveiled products around the e-CNY during the weekend. According to the Global Times, China Construction Bank unveiled a digital yuan wallet in addition to its mobile app. The digital wallet can be used for transactions across all digital yuan terminals.

The Industrial and Commercial Bank of China also revealed a similar bracelet-like wallet that allows transactions without phones.

Meanwhile, the Fuzhou government gave out Saturday free coupons worth 20 million yuan to stimulate local use of the digital yuan. Likewise, tech firms formed a digital yuan tech alliance to promote the adoption of digital yuan. The tech firm alliance includes 37 members. Notable among those are Newland Digital Tech and Huawei Technologies Co.

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Babafemi Adebajo

An experienced writer with practical experience in the fintech industry. When not writing, he spends his time reading, researching or teaching.

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