To protect the financial system, watch the digital yuan used by terrorists

In November of this year, the Public Security Department of Xinmi City, Henan Province arrested a case of fraudulent communication and fraudulent organization. He said it was the first time digital yuan has been laundered in South Korea, where security agencies have been arrested since the attempt to use the digital yuan in Korea.

Your partner won't believe it. Among the many digital advantages, can the “best” of the renminbi be used as a financial instrument? Today, the Sa Sister Sa legal team is here to discuss the potential risks of digital renminbi coins and how to protect them from terrorists.

What is the digital renminbi?

The digital yuan has been called "stable" because of its legitimate advantages. The digital renminbi (e-CNY) is a digital form of fiat currency issued by the People's Financial Corporation of China, operated by a company operated and traded to the public. As a multi-faceted expense, it facilitates integration with bank accounts as well as bills and coins.He has the value of character and legitimate gifts, supports controllable anonymity.

The digital renminbi is mainly cash in circulation (M0), supported by national credit, and the legal value benefits of using cash. In other words, the digital renminbi is also a legitimate asset of the People's Republic of China.

So far, the digital renminbi has adopted the hierarchical restriction standard, and different levels of digital wallets have been released to meet the needs of different payments of the people according to the different level of KYC (Know Your Customers). According to public information, the bank has expanded to five different RMB wallets.

Type 1 wallets must be opened at the outlet level, and type 2 to 5 wallets can be opened from the Internet. See the image below for more details).Non-physical persons, such as traders, can open "bank wallets" and link banks by face and witness the business certificate, identity document and other proof of identity of digital RMB and account banking. money. .

Classification table of digital wallets:

Based on the above classifications, it can be seen that the digital renminbi has some anonymity. 2 to 5 wallets do not need to be signed at the bank and 4 to 5 accounts do not need to verify the valid number. But Mu Changchun, director of the People's Bank of China at the Institute for Digital Financial Research, said anonymity was a form of "anonymous control."

The main concept of anonymity is anonymity, which describes the function of the digital RMB M0 and protects the necessary requirements of anonymity and public confidentiality. The aim is to prevent, control and prevent financial transactions, financial evasion, tax evasion and other crimes and violations, and to regulate financial security.

Privacy of the purpose of type 4 and type 5 personal wallets, and these two wallets do not require an identification number in the verification process, and can only broadcast messages to mobile phone directly without any restriction on the bank card . Because the cell phone number is now a real name recognition, the user can easily track it, and it is only applicable to small business in everyday life.It is important to note that this type of anonymity concerns real anonymous and back-end names, which are anonymous at all.

Pros and Cons of Digital RMB Money Laundering Protection

As mentioned above, the anonymity of the renminbi is "controllable", that is, the first end is anonymous and the last is the real name, which contributes to the resistance to blocking financial transactions.

On the one hand, it helps you get a complete picture of your users. Unlike digital funds, the renminbi uses anonymous checking procedures. User is optional and the real name is behind the front seat. It identifies unique characteristics from large files and quickly compares and closes real name entities to protect users' personal information, as well as quickly identify illegal activities and actions like laundry and financial abuse.

On the other hand, the identification of digital yuan trade policy with the completion of the trust information system announced the exchange request, which was completed by the central bank authentication centers. As a result, all data interchange is transmitted to the bank, interchange data is not exchanged and big data, intelligence and other technologies are used to create large data interchange files, analyze the data. exchange, track money flows and investigate money laundering secrets. Make it transparent, strengthen the ability to control business information, verify the timing and benefits of illegal money, improve the accuracy of corporate financial protection, and prevent financial fraud, corruption and tax evasion and other crimes and eliminate them. It prevents crime and maintains good financial security.

At the same time, the digital renminbi has adopted "small and big data anonymity" designed to be a financial system, all digital people have a social number and can still be tracked down. money., you can follow the whole process of return and withdrawal.These features not only ensure the security of digital RMB activity, but also effectively solve the “free anonymous” problem of traditional cash registers., stands for “cash” and then “cash” to prevent thieves from blocking the flow of money and hiding the location and location of illegal money.

However, the digital yuan will always bring new challenges to the protection of the financial sector. First of allIt is difficult to identify anonymous consumer wallets..

Type 1 and Type 2 wallets should be linked to the bank account and, after all, to the self-interest of the bank's clients. Although the three types of wallets are not binding on the bank, a check must be made, and even if the level of the name is really low, the consumer does not need to be the user of the bank account.

Type 4 and Type 5 wallets are non-real name wallets, which can only be opened with a cell phone number without any restrictions on the bank or verification process. When a company examines and decides on underdogs and underdogs, it is even more true. difficult if they do not have the right to identify consumers by mobile phone and cannot identify factors such as the age of consumers. , last name, address and profession. When you open a Type 4 or Type 5 wallet with a purchase or loan cell phone number, it cannot be identified even by the actual user of the wallet.

Second, the role and authority of financial protection management for wallet users is unclear. Users who open a renminbi digital wallet in the workplace are different from “consumers” in the traditional workplace.At present, there is no clear policy on whether the agency should implement certain levels of financial protection for wallet users.. For example, based on bank debit card flows and historical records of Type 1 and Type 2 users, Bank A concludes that Consumer A has been a victim of money laundering or financial criminals and submits a offense report and you can. . Monitor the management of banking activity.

Under these circumstances, can banks resort to specialized money laundering to manage the risk to consumers' wallets? There are no clear rules for managing financial risk at home.

What is the employee's financial responsibility? NeedsNew legal risks to manage

As mentioned above, the digital renminbi not only supports financial protection operations, but also creates new problems. So, for businesses, does the emergence of the digital yuan mean that businesses have to pay for new compliance issues?

The answer is a categorical 'yes', in particular, the role and authority of anti-money laundering control regulations for wallet users is not sufficiently clear. In the past, money launderers could send fraudulent alerts and perform arithmetic alerts if they found users suspected of money laundering. However, in the case of the digital yuan, as discussed above, the identity of the user is sometimes ambiguous, which can lead to attacks by banking institutions against money laundering. And if banks do not disclose assumptions of a financial economy, companies participating in these practices can easily become advisers or think there is a business enterprise.

This means that companies need to be more careful with exchange rates and returns when using the digital yuan. The problem, however, is that users of digital yuan are often unsure of banks and businesses. As a result, the risk-based decision-making process in the industry has become increasingly important.

In addition, during a financial crisis, legal income from black money is usually included in that income. When these models are incorporated into the digital renminbi, there may be a "minefield" involved in money laundering after the same operation due to user concealment.

enter at the end

In order to avoid the risks of financial transactions, banks should be supervised in the appropriate places to perform 'anonymous management', while businesses should take all necessary steps to establish awareness of compliance and avoid legitimate risks. .