A former senior executive with one of China’s big six state-owned banks has highlighted the major impacts that the digital renminbi will have on the functioning of the Chinese monetary system.
Wang Yongli (王永利), formerly the deputy-president of the Bank of China, said that the digital renminbi is characterised by “limited anonymity,” which means the payments data of consumers will be off-limits to vendors and third party payments providers, and only made available to government authorities for the purpose of the investigation of illicit transactions.
This stands in marked contrast to the situation at present, under which payments platforms are capable of accessing the information of both parties to transactions.
“The main expression of limited anonymity lies in the concentrated placement of all digital renminbi user information and all transactions data with the central bank, giving it a more complete set of big data than all of today’s commercial banks, third party payments organisations and online platforms,” said Wang.
“This is likely to have a major role in the breaking of data monopolies.”
Wang made the remarks on 21 November at the 2020 “Understanding China” International Forum in Guangzhou. (“读懂中国”国际会议（广州）平行研讨会).
Wang points out that the Chinese central bank’s unified management of the digital renminbi could also lead to the replacement of all forms of traditional money.
“The concentration of digital renminbi user information and transaction data with the central bank will form a ‘single ledger’ for all of society’s digital renminbi at the central bank,” said Wang.
“At the same time, the basic accounts of the central bank and the operational accounts of commercial institutions will co-exist and be inter-linked within the financial system.
“This can enable the digital renminbi to replace all traditional money to the greatest extent possible – not just cash, but also including the extension of loans and the purchase of bonds by commercial banks.”
