China should draft new laws and regulations for the digital yuan to address privacy concerns and clarify how it operates, a senior Chinese state bank official proposed.
The new law should clearly define the duty of the central bank to protect users’ privacy and make sure their information is only accessible for the purpose of protecting national security, Wang Jingwu, vice president of the Industrial & Commercial Bank of China Ltd., said in an article published by the China Finance magazine Monday.
The duty and rights of parties involved in the distribution of digital yuan, which include the People’s Bank of China, commercial banks, merchants and users, should also be clarified in the legislation, said Wang, who is also a National People’s Congress delegate and a former head of the PBOC’s financial stability bureau.
China should also amend regulations concerning the regular yuan currency to clarify the status of digital yuan as legal tender, and define the circumstances under which companies or individuals may reject the virtual currency due to technical issues, he said.
China has been testing the digital yuan in about a dozen regions since 2020. Drafting a specific law or regulation is seen by some as one of the prerequisites for a national roll-out, for which the PBOC hasn’t set a timeline. It could also address concerns over the sustainability of the virtual currency by defining the responsibilities and rewards for operating institutions.
Comments are closed.