China suspends CBDC czar implicated in crypto corruption allegations

After extended investigations, Yao Qian, former director of the Science and Technology Supervision Department of the China Securities Regulatory Commission, was expelled from the party and removed from office for using the digital yuan in quid-pro-quo interactions.

China has chosen to expel Yao Qian from public office and seize his illegal gains. The investigation revealed that he was involved in several acts of corruption, including using the digital yuan illegally. His behavior is an early bad omen for the digital yuan, as it has been proven that it can be exploited in illicit scenarios.

The Shanwei Municipal Supervisory Committee of Guangdong Province decided to transfer Yao Qian to the procuratorate for review and prosecution in accordance with the law for suspected criminal issues. In addition, they will also reclaim the property he acquired during his tenure.

Investigation into Yao Qian’s corruption 

Yao Qian is reported to have abandoned his original duties as a technology service provider. Instead, he painted a new face that was not political, desired fame, and regarded himself as a financial technology expert. 

He abused regulatory powers, including the right to recommend, formulate, and execute policies. He also sought improper benefits for others in expanding business and procuring software and hardware for information technology system service institutions. 

In addition, he used the digital yuan to trade power for money by engaging in illicit activities. He also illegally accepted valuable items such as Maotai liquor and banquets. 

Investigative reports also alleged that he sought benefits for others in recruiting employees, which violates discipline and integrity. He also illegally borrowed large sums of money from the supervision directorate and invested in enterprises. He also illegally accepted properties valued at extremely huge amounts.

China’s protocol in the CBDC investigations

The investigation was approved by the Central Commission for Discipline Inspection, the National Supervisory Commission, the Discipline Inspection, Supervision Group of the Central Commission for Discipline Inspection, the National Supervisory Commission stationed in the China Securities Regulatory Commission, and the Shanwei Municipal Supervisory Commission of Guangdong Province.

The acquisitions were looked into using “Regulations on Disciplinary Punishment of the Communist Party of China,” “Supervision Law of the People’s Republic of China,” “Administrative Punishment Law of the People’s Republic of China for Public Officials” 

The nature of  Yao Qian’s behavior is serious, and the impact is bad for the digital yuan. As the leader of the charge, the digital yuan is a key element in China’s strategy to enhance financial sovereignty. The yuan is well able to provide an alternative to crypto like Bitcoin, which it completely banned.

The People’s Bank of China reported that the digital yuan has reached 180 million individual wallets as of July 31. According to local media reports on October 11, the CBDC has facilitated transactions amounting to over 7.3 trillion yuan (over $1 trillion) across pilot regions. 

The digital yuan was introduced in 2014 and has recorded widespread application across different sectors. This includes retail, healthcare, and public services. In addition, the digital yuan is helping China reduce its reliance on traditional financial infrastructures, facilitating smoother participation in the global digital economy.

Other than domestic adoption, China has sought international collaboration to extend the digital yuan’s influence globally. The Chinese central bank has partnered with central banks in Thailand, the UAE, and Hong Kong to establish multilateral digital currency bridges aimed at improving cross-border payment efficiency.

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