Tim Alper
Last updated:
July 4, 2024 at 02:30 GMT+3
| 3 min read
Chinese banks say they will fight back against digital yuan-themed money laundering and identity theft schemes by rolling out new security protocols.
Per the Beijing Business Daily, “some banks” have “taken action” following updated CBDC guidelines.
These guidelines pertain to anti-money laundering and combating the financing of terrorism efforts.
Chinese Banks Step Up Digital Yuan Security.
The group of banks includes the state-owned Postal Savings Bank of China. The bank will now require wallet holders to submit “verification” and authenticate wallets with personal data.
This includes customers’ names, gender, nationality, occupation, residential or work addresses, and contact telephone numbers.
The bank’s customers will need to prove their identity using identity documents. Banks will also perform checks to ensure all of these documents are valid.
The bank explained that in cases where customer identity information is “incomplete” or proof of ID documents are expired, it will take action.
If customers fail to respond within 90 days, the bank will “take measures.” These include “reducing transaction limits and restricting financial services” on CBDC wallets.
The Postal Savings Bank of China said that customers could lift these restrictions by submitting their data via the digital yuan app or mobile banking platforms.
They can also submit data and ID documentation at bank branches nationwide.
An unnamed customer stated that the “digital yuan” platform “also needs to check whether” the “real” user of a wallet was making transactions. “This increases our sense of security,” the customer explained.
The move will raise questions about privacy. The central People’s Bank of China has insisted that its CBDC will build in anonymity-protecting features.
However, bankers are now claiming that “especially” in the case of anonymous CBDC wallets, “it is important to balance user privacy protection with risk management.”
Criminals Target Digital Yuan Funds.
The media outlet quoted a banking industry expert as stating that the Postal Savings Bank was responding to a rise in criminal activity.
The expert said criminals have “set their sights on the digital yuan,” and have been “luring financial consumers” into fraudulent schemes.
Financial sector experts said…
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