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The Chinese Xiongan New District alarmed of telecom fraud using the digital yuan, a digital currency the Chinese Central Bank started issuing recently, CoinDesk reports. The local government and branch of the People’s Bank of China signed a notice on Thursday, Nov. 18 on this note.
Fraud cases making headlines
There has been no shortage of fraud incidences involving China’s digital currency lately. In early November, police in Henan province arrested 11 people for using the digital yuan to launder money for Cambodian gangs. This week, police arrested a woman for committing fraud using the CBDC in an amount equivalent to $40,000.
Not promising for CBDCs
CBDCs were conceived of as a safer, more secure alternative to traditional cryptos, which would be less prone to fraud. The frequency of such cases, however, seems to indicate that prediction was off the mark. What’s even more disconcerting is that many of these cases are in China, which has taken very strict measures against crypto.
Not ready to roll out?
The news might also show that security experts still need to work on vulnerabilities of China’s CBDC, which apparently isn’t ready to be rolled out. Xiongan authorities warned people of scammers impersonating them, not to use unauthorized sources to download e-CNY apps, and to refrain from trading on “digital yuan exchanges.”
Digital yuan transactions amount to $9.7B
China is projected to become the first major economy in the world to launch a CBDC. Transactions in the digital yuan amount to $9.7 billion, said Mu Changchun, the head of the digital currency research institute at the People’s Bank of China, on Nov. 3.
140 million opened digital yuan wallets
According to Reuters, 140 million people have opened digital yuan wallets and over 1.5 million merchants can accept payments using such wallets. According to Bloomberg, 10 million corporate accounts have been created by today’s date.
At the end of June, the transactions carried out by 34 million individual and corporate digital wallet users totaled $5.4 billion, Bloomberg data showed.
Mu did not share an official launch date for the CBDC, which has been undergoing trials nationwide.
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