A lot of eyes are on the Chinese central bank. The institution has confirmed it will launch a digital yuan “soon’, and some more details have come to light this week.
Creating a new stablecoin pegged to the yuan will not be an easy feat. Especially if that yuan continues to be devalued by the Chinese central bank every so often.
The Digital Yuan Might be Pseudonymous
That said, the Chinese Digital Currency Research Institute has a clear vision in mind.
In their opinion, they need to protect the privacy of users, while still enforcing strict regulatory guidelines. That will be a very tight rope to walk, as both options appear mutually exclusive.
It is rather surprising to learn the PBoC will not try to deanonymize its users in full. Instead, they will show some degree of leniency, at least on paper.
One often overlooked aspect of using physical currency is how it provides a degree of privacy. No one knows a person’s name or financial details simply by accepting their coins or bills.
Translating that aspect to the digital yuan will pose a wide variety of challenges for the PBoC.
Making the currency subject to anti-money laundering and counter-terrorist financing guidelines appears to be a walk in the park, in comparison.
Despite announcing these new details, the PBoC has not offered any official release date for the new digital currency.
Even today, the opinions regarding this venture remain divided among blockchain experts.
Not everyone sees merit in China exploring this option right now, given the country’s history of surveillance and censorship.