China vows to protect digital yuan user data

The head of the digital currency unit at the Chinese central bank said that his country will protect data related to the use of the digital yuan, as the country moves forward with electronic currency tests.
Only a limited amount of personal information is collected when people use the digital yuan, and access to it is to be restricted, Mu Changchun, head of the Digital Currency Institute at the People’s Bank of China, said during a forum in Fujian, China, on Sunday.
For normal transactions and purchases, neither the People’s Bank of China nor the platforms that operate and exchange the digital currency will be able to get all the information about the trading, Mu said.
The banking official said that the authorities should only request that the data be used when it is necessary to investigate transactions suspected of violating the laws, Bloomberg reported.
Mu stressed that the digital yuan has the highest level of privacy protection among existing digital payment instruments. However, he said it was not appropriate for a digital currency to be anonymous like cash, as that would facilitate money laundering and other illegal behaviour.
He pointed to the need to establish a “quarantine” mechanism and usage restrictions to regulate the use of customer data, adding that cryptocurrency platform operators should establish an internal system to protect customer data and monitor related business.