Category - CBDC

China says a “completely anonymous” digital yuan is “not feasible”

The country pioneered state-backed digital currencies and plans to launch the digital yuan before the 2022 Winter Olympics.

The Chinese government wants to maximize privacy options in the upcoming digital yuan, the state’s native “Central Bank Digital Currency” (CBDC), a report said Monday (and China is getting bullish on Bitcoin).

Officially called Digital Currency, Electronic Payment (DCEP), the Chinese digital currency is backed 1:1 by the yuan and is on track to become the world’s first government-backed stablecoin.

Current products on the market, such as Tether and others, are operated by private companies and are unregulated. In most cases, Bitcoin (go to Plus500 Buy Bitcoin Guide) is unregulated and trustless.

Last weekend, Mu Changchun, head of the People’s Bank of China’s Digital Currencies Research Institute, said that so-called “controllable anonymity” was an important feature in the design of the e-yuan.

However, he added that complete anonymity – as offered by private cryptocurrencies such as Dash and Monero – was “not feasible” because CBDCs would have different reporting standards.

According to Changchun, large transactions would be monitored and tracked to prevent illegal transfers from the country and maintain financial security. Also, complete anonymity would thwart the use of DCEP, i.e., money laundering, terrorist financing, and tax evasion.

Bank of Japan to launch CBDC experiments this year

CBDC

The Bank of Japan (BOJ) will experiment with its central bank digital currency (CBDC) later this year, central bank governor Haruhiko Kuroda says

Bank of Japan Governor Haruhiko Kuroda said the top bank needs to be adequately prepared for when it should issue its CBDC. He said this during a seminar yesterday.

According to the Reuters report, Kuroda said the BOJ needs to issue its digital currency. He said this is the reason they would experiment with their CBDC before the end of the year. He said, “To ensure the stability and efficiency of the overall payment and settlement systems, it is important to thoroughly prepare to respond appropriately to changes in circumstances.”

Kuroda disclosed that the Bank of Japan has no immediate plans to issue CBDC. However, central banks may not wait until needs arise to begin developing digital currencies. His statements are consistent with those he said during a webinar last July.