- The goal of DCEP is to keep the balance between the ‘controllable anonymity’ and AML & CFT — Mu Changchun
- China’s digital currency not seeking full control of the general public’s information added the senior official
The goal of China's offering for a digitized domestic currency is to assure the privacy and concerns of authorities’ need for information, a senior official said on Tuesday. It isn’t a way to gain the complete authority of the general public’s information.
Market observers, however, believe the country’s “over-obsessive control and governance” could be the driving factor behind the Digital Currency Electronic Payment (DCEP).
After five or six years of research, They are getting ready to become the 1st country to introduce its central bank-backed digital currency. A situation that is being scrutinized diligently by financial services industries and governments worldwide.
Some like Michael Novogratz believes China’s digital currency may undermine the U.S. reserve status.
Striking a Balance
Currently, there aren’t many details revealed about the digital currency but similar to other cryptocurrencies and Facebook’s proposed Libra, DCEP will be driven in part by blockchain tech and will be distributed through digital wallets.
However, it will provide Beijing an exceptional oversight over money flows and control over its economy.
“We know the demand from the general public is to keep anonymity by using paper money and coins … we will give those people who demand it anonymity in their transactions,” Mu Changchun, head of the People’s Bank of China’s (PBoC) digital currency research institute, said in a conference in Singapore.
“But at the same time we will keep the balance between the ‘controllable anonymity’ and anti-money laundering, CTF (counter-terrorist financing), and also tax issues, online gambling, and any electronic criminal activities,” he added.
“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.”
The release date of the new digital currency is not known yet though Mu told a public forum in August that it was “almost ready” while Chinese central bank chief Yi gang said in Sept. there was no timetable or its rollout.
On Tuesday Mu said the goal of the project is to create a new system and boost financial inclusion in rural areas as the electronic payments in the country's existing financial structure is dominated by only two players.