Caixin
Sep 24, 2022 03:09 AM
FINANCE

Central Bank Warns of Telecom Scams Involving Digital Yuan

What’s new: Since China launched trials of the digital yuan, known as the e-CNY, criminals have taken advantage of insufficient public awareness to conduct telecom scams, a senior People’s Bank of China official warned.

China will fully respect privacy and protect personal information for digital yuan users and will focus on risk prevention to prevent telecom fraud and meet anti-money laundering and anti-terrorist financing requirements, Mu Changchun, director-general of the central bank's Digital Currency Research Institute, said in an article in Modern Bankers journal.

For use of the digital yuan, the central bank collects less user information than traditional bank accounts and other electronic payment methods, Mu said.

Limited anonymity is a key feature of the digital yuan, but if the level of anonymity is too high, it could become a tool for criminals to carry out telecom fraud, internet gambling, money laundering, drug trafficking and other crimes, Mu said.

The background: China has rolled out a pilot program to test the digital currency’s functions, applications and reliability. The program has expanded to cover 23 cities and regions.

As of the end of May, around 264 million e-CNY transactions worth about 83 billion yuan ($11.8 billion) were completed in pilot areas, with more than 4.5 million merchants accepting payment with the digital currency, according to Zou Lan, director of the People’s Bank of China’s monetary policy department.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)

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