Yi Gang, the Governor of the People’s Bank of China (PBoC) has reiterated that discussions about his Central bank digital currency (CBDC) called Digital Yuan (e-CNY) are more focused on the privacy aspects of their operations for users.

Speech At the Hong Kong Fintech Week, Yi said privacy protection is at the top of his list.

Going out as one of the Central Banks Taking a personal interest in CBDCs, the PBoC said its e-CNY is primarily focused on domestic retail transactions as an important complement to cash in the digital world. He said that in an attempt to protect consumer privacy, he has employed a 2-tier system.

At the first level, Yi Gang acknowledged that the PBoC facilitates inter-institutional transfers with banks under its jurisdiction. At this stage, no customer information is collected. At level 2, banks distribute e-CNY directly to consumers, but obtain only the information that will allow them to comply with the law.

Yi Gang pointed out that no entity will be able to prove a transaction without rigorous legal permission, giving most users the security they need to adopt e-CNY.

“The PBOC ensures the security of personal information through advanced technology and strict management, with full compliance with consumer privacy protection laws and regulations. Transaction-related data is encrypted for storage,” Yi Gang said in the speech, further assuring that “confidential consumer information is anonymized to non-transacting parties. Entities and individuals are prohibited from consulting or using the information arbitrarily without rigorous legal authorization.”

China appears as the most advanced economy in the world with a functional CBDC in circulation. While the digital legal tender has yet to be officially released for everyone in the country to use, its retail pilot tests have been strong, with a presence in major cities, including Suzhou and Shenzhen, among others.

Yi Gang said that the PBoC has an active collaboration with the Hong Kong Monetary Authority (HKMA) when it comes to CBDC interrelationship and said that the bank is interested in creating other similar relationships with other central banks around the world.

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