Will China’s digital yuan be used as a surveillance tool? This is the question that has been asked since the early days of the development of China’s central bank digital currency (MNBC). And the first uses tend to confirm how Beijing intends to use it. We take a closer look at the future of China’s currency
The first uses of the digital yuan are becoming clearer
China is among the best-placed economies in the race for MNBCs, and its digital yuan is beginning to be disseminated. Usage will be particularly closely monitored, as the authoritarian government has made it one of the pillars of its future development. We now know that the digital yuan will be linked to a digital identity for users, and that this should make certain procedures easier… Including surveillance procedures.
Watcher.Guru shared a video showing one of the new uses of the digital yuan. It shows a vehicle speed control department. Here, digital yuan wallets appear to be directly linked to car drivers, and fines are automated the moment the ticket is issued:
China’s CBDC is linked to a Digital ID, if caught speeding, a fine is instantly deducted from your digital wallet by a surveillance system. pic.twitter.com/ioR9gW8tSV
– Watcher.Guru (@WatcherGuru) July 29, 2023
Digital yuan users would no longer receive a fine to pay, but the amount would be taken directly from their digital wallet.
A payment facilitator or a surveillance tool?
China has in recent months had rare confessions of disappointment when it comes to the adoption of its digital yuan. The country’s residents, already accustomed to other payment systems such as Alipay, sometimes express distrust of China’s MNBC. For several years now, Beijing has been saying that it wants to integrate payment technologies into its social credit system. This raises the question of the future uses of the digital yuan.
The fear is that the digital yuan will become a new surveillance tool, as seen in the example of speed cameras. Beijing has issued a number of statements in an attempt to reassure the public about the technology’s supposed anonymity. The government claims that the Central Bank guarantees “reasonable” protection of personal information for the public. But in reality, things are more complex than that. China’s Cybersecurity Law authorizes the government to obtain data from any entity under the guise of “national security”.
The government can therefore monitor – and control – users’ transactions. In addition, the digital yuan has been integrated into the payment of taxes, welfare benefits, public transport tickets and certain salaries. A Chinese citizen using the digital yuan could therefore, in theory, be monitored in many areas of his or her personal life.
