Former PBOC governor Yi Gang discusses the digital yuan’s privacy features amid concerns about CBDCs. The currency still struggles to compete with established mobile payment platforms.
Aaron Day’s recent comments on X (Twitter) highlight significant concerns about fiat and central bank digital currencies (CBDCs). He pointed out the risks of account cancellation, frozen funds, data privacy issues, and unilateral changes to terms by banks. He argued that CBDCs could exacerbate these issues.
Former PBOC governor Yi Gang addressed these concerns by discussing the digital yuan's “controllable anonymity” feature, designed to balance privacy and security. However, the digital yuan still faces competition from established mobile payment platforms like Alipay and WeChat Pay, which are deeply integrated into daily financial activities in China.
Despite challenges in adoption, the digital yuan has seen progress. The Industrial and Commercial Bank of China (ICBC) reported significant growth in e-CNY wallets, with millions of new users and merchants. However, this represents only a small fraction of the potential market.
Since its launch, the digital yuan has processed transactions totaling approximately $249.33 billion, a modest portion of China's total money supply. To boost adoption, the central bank is expanding the digital yuan's use to public services and exploring new applications with commercial entities like JD Technology.
The future of the digital yuan hinges on overcoming privacy concerns, expanding its utility, and competing with established payment platforms. Its success will depend on whether it can become a staple in China's financial sector.
