China’s central bank digital currency (CBDE) has excellent privacy features. according to Mu Changchun, the CBDC research head. Speaking during the China Development Forum 2021, Mr. Changchung said that the digital yuan has high privacy protection standards.
His remarks came at a time when countries around the world are working on tough anti-money-laundering (AML) measures against cryptocurrencies. China’s CBDC is being pilot-tested in Chengdu, an effort that started in March 2021.
While the digital currency protects user privacy, it is not completely anonymous like most of the decentralized cryptocurrencies like Bitcoin (BTC) and Monero (XMR). Mu Changchung asserted that the the digital coin cannot be completely anonymous, since that would not be practical. The CBDC is simply a digital version of the Chinese Yuan and other state fiat currencies.
Mr. Changchung told the conference that anonymity based on international consensus would not be possible because it would not be risk-limited or risk-controllable. The digital yuan project is one of the most developed central bank digital currencies worldwide and is part of a strategy to improve its economy.
Different news outlets have refuted Mu Changchung’s report that the digital yuan is completely private. These outlets raised concerns that the e-CNY a massive financial tracking tool.