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As China moves forward towards the launch of the digitized version of its traditional currency, investors and financial authorities all over the world closely monitor and assess its implications for the general public.
With worries of surveillance and abuse in mind, the head of the People’s Bank of China’s digital currency research institute Mu Changchun stressed that the digital currency is not intended to empower the state to control private information of the public. Instead, it will function to mitigate security issues by providing the Chinese government the tools to gather only that information which is necessary for enhancing the security of its public.
Expanding further on what he said earlier, Mu Changchun said at a conference in Singapore that the general demand from the public is to keep anonymity through the usage of paper money and digital coins. He acknowledged that the state was cognizant of this need and will ensure that through the new digital currency platform, “controllable anonymity” in transactions is ensured.
The central narrative through which the Chinese state has defended its aggressively centralized digital currency is based on a need for a balance between anonymity and anti-money laundering and other criminal activities that the government wants to maintain. “That is a balance we have to keep, and that is our goal. We are not seeking full control of the information of the general public,” Changchun asserted.
China’s Digital Currency May Be Ready in 2-3 Months
China is steady on its path to roll out the first public digital currency to the world. Experts report that the crypto platform may be ready in next two to three months. Jack Lee, a managing partner of HCM Capital, apprised reporters that China had prepared a framework called Digital Currency Electronic Payment or DCEP. From this platform, the state will be able to issue the digital currency to commercial banks and third-party payment networks through AliPay and WeChat Pay.
While details on the structure and deployment of the Chinese state-sponsored digital currency have been sparse, officials from the Central Bank keep stressing the importance of digitizing the national currency. The current pipeline of commercial activity is susceptible to many flaws where the state has very limited powers to gather and act on information on criminal activities.
Money laundering and illegal gambling in particular have been a problematic issue with which China struggles to deal each year. However, with the new digital currency, the Chinese government hopes to deal with such issues more effectively.