The Chinese digital currency will not be used to strengthen control over the personal data of citizens, but will only help to find a balance between ensuring confidentiality and the needs of the authorities in obtaining reliable information, the representative of the People’s Bank of China (PBoC) said.
China is preparing to become the first country to launch a national digital currency. Although not to much is known about PBoC stablecoin, the initiative of the Chinese authorities caused a lot of controversy and fears regarding the potential impact of digital currency on the global financial system.
It is assumed that the new currency like Facebook’s Libra and other cryptocurrencies will partially work on the blockchain and be used through digital wallets. However, the stablecoin design will allow Beijing to fully control cash flows and manage the country’s economy, giving the government power that most central banks do not have.
At the same time, Mu Changchun, head of the PBoC research institute, claims that the launch of the state digital currency has completely different goals, including the creation of a new payment system that is integrated into China’s existing financial infrastructure and accessible in the most remote areas of the country.
“We know that the main requirement of the public is to ensure anonymity when using fiat money, and the government guarantees the confidentiality of transactions with the new digital currency. However, we intend to maintain a balance between controlled anonymity and the fight against money laundering, combating the financing of terrorism and issues related to taxation, online gambling and any illegal activity. Our goal is not full control over the information, but maintaining this balance” – Mu said at a conference in Singapore.