China’s digital currency called e-CNY is gradually being allowed to make inroads into the fintech sector of the world’s most populated country. Now that the testing of e-CNY has percolated inside major cities, the governor of China’s central bank has revealed some key aspects that were considered while designing the digital currency. Safeguarding user privacy and zeroing-in on ensuring financial security for the people were the two key features that were given most importance, Yi Gang, the governor of the People’s Bank of China (PBOC) revealed to the media.
Between 2020 and 2022, China launched its e-CNY app to facilitate payments through the CBDC. As of April 2022, people in 23 cities across China, including Shanghai, Beijing, and Shenzhen, were enabled to pay for goods and services with the e-CNY, China-Briefing had said at the time.
The governor of POBC has hinted that the governments issuing CBDCs must keep some breathing space in terms of being involved in the CBDC ecosystem.
As per Gang, the central bank of China will have a limited role in the CBDC eco system. The PBOC will manage the operating system of the e-CNY and will also handle international transactions that will convert foreign currencies to e-CNY.
The PBOC claims that it does not control the personal transaction information of the e-CNY.
The responsibility of e-CNY circulation and exchange services are reportedly taken care of by the so-called “designated operating institutions”.
“The PBOC strictly follows relevant laws and regulations on consumer privacy protection and ensures the security of personal information. Transaction data is encrypted and stored. [The bank anonymises] personal sensitive information, which is not visible to third parties. Without the full authorisation of the law, no unit or individual may inquire about or use the relevant information,” Gang said in an official statement.
Cash rewards are offered to Chinese nationals who adopted and used the digital Yuan. While many merchants have opened payments in e-CNY, the digital currency is also being tested to function for loan repayments as well as tax payments.
China’s bordering neighbour India has also launched its Digital Rupee CBDC into its pilot phase on November 1.
In a concept note on CBDC, the RBI said CBDC is aimed to complement, rather than replace, current forms of money and is envisaged to provide an additional payment avenue to users, not to replace the existing payment systems.
“While the e-rupee is essentially the same as a fiat currency that’s available in a digital form, it is expected to bring in much more transparency and efficiency into the system while overcoming the existing risks and challenges of overdependence on the paper-based currency culture. It is yet another momentous steps towards a ‘digital-first’, paperless Indian economy as envisioned for the longer-term future,” Poorvi Sachar, Head of Operations, Tezos India told Gadgets 360 while commenting on India’s CBDC pilot.