arrow-up
Market Musings

Spying on Citizens Not Goal, Says Former Head of Digital Yuan Project

By
Published on:
June 1, 2021

The first head of the central bank’s digital currency institute denies U.S. Fed Chairman’s accusation that China wants to monitor spending in real time.

Spying on Citizens Not Goal, Says Former Head of Digital Yuan Project

Table of Contents

China did not create a digital currency in order to spy on its citizens, a former head of the central bank’s digital yuan project said.

 

Speaking on May 30, Yao Qian, former director of the digital currency institute at the People’s Bank of China, said “helping the government see all transactions in real time was not the intention of the Chinese central bank,” according to Bloomberg

 

Rather than monitoring the spending habits of its citizens, he said, the People’s Bank of China was seeking a balance between protecting users’ privacy and its ability to pursue crimes like money laundering, tax evasion, and financing terrorism.

 

Which is roughly what the digital currency institute’s current head, Mu Changchun said in November 2019. But, he described that goal somewhat differently.

 

While promising to "give those people who demand it anonymity in their transactions,” Mu qualified it more aggressively, calling for “controllable anonymity,” which has been called an oxymoron.

Mu said:

“We will keep the balance between the ‘controllable anonymity’ and anti-money laundering, CTF [countering the financing of terror] and also tax issues, online gambling, and any electronic criminal activities. That is a balance we have to keep, and that is our goal.”

Mu’s description of the kinds of activities that would cause the government to monitor spending was not only far broader, that last item — “any electronic criminal activities” — could have far-reaching consequences in a country that aggressively monitors the internet and digital communications for illegal anti-government comments.

 

Too Much Tracking for U.S.

Yao’s comments came in response to U.S. Federal Reserve Chairman Jerome Powell’s suggestion in late April that the digital yuan “really allows the government to see every payment for which it is used in real time.”

 

A digital currency offering the government that level of tracking capability, Powell said, “is not one that would work here.”

 

It would also be bad for the U.S. dollar’s status as the world’s reserve currency, Powell said. “That’s because of our rule of law; our democratic institutions, which are the best in the world,” he added.

This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.

Author(s)

Leo Jakobson

I'm an NYC-based journalist covering crypto and business.

Join the thousands already learning crypto!

Join our free newsletter for daily crypto updates!

Email submitted!
Oops! Something went wrong while submitting the form.

Related Articles