THE ROLE OF THE CONCEPT OF “MANAGED ANONYMITY” IN THE INTRODUCTION OF CHINA’S CENTRAL BANK DIGITAL CURRENCY

Abstract

The factor behind the introduction of China's own digital currency was the idea of moving away from the use of major world reserve currencies and gradually expanding the use of national currencies in international settlements, the idea of reducing dependence on major players and gaining leadership status in the global financial market. The People's Bank of China introduced the concept of "managed anonymity", which became one of the design features of the central bank digital currency (CBDC), e-CNY. The entire digital yuan system is under state control and fully accumulates huge amounts of payment data. The means of storing digital yuan, as well as tools with which users can initiate payment transactions and interact with other participants, are digital wallets, which are divided into different levels according to the level of KYC. Managed anonymity takes into account the two-tier operational structure of e-CNY, the matrix design of the wallet and the features of user consent, the anonymity function of CBDC in terms of international perspectives, financial integrity rules, risk prevention precautions and, in particular, the framework of e-CNY to combat money laundering, terrorist financing and tax evasion and other criminal activities, and considers the issue of improving the legal framework. In such a system, the regulator plans to use proven technological solutions and operational skills of credit and financial institutions in payments, taking into account the specifics of the Chinese economy. The digital currency system, built on two levels, organically fits into the existing two-tier monetary system.The launch of the digital yuan provides a number of advantages from the perspective of the PBOC, namely, the possibility of more accurate calculation of macroeconomic indicators, for example, the inflation rate, expanding the possibilities of collecting real-time information on the features of CBDC circulation, which can be useful for the implementation of monetary policy, preventing money laundering, terrorist financing and tax evasion, in particular, through the use of Big Data capabilities, reducing information asymmetry between financial institutions and regulators. In general, CBDC provides for a much more significant role of the PBOC in the economy.