China Launches Network ID Platform as Digital Yuan Expansion Continues

China’s Ministry of Public Security and the Cyberspace Administration of China (CAC) have jointly introduced a new network identity proposal that aims to enhance data security and real-name registration across internet platforms. The initiative represents a significant evolution in China’s digital identity infrastructure, building on the country’s existing citizen ID system.

The proposal centers on establishing a Network Identity Authentication Public Service Platform that will manage two key components: Network ID Numbers and Network ID Certificates. These digital credentials function similarly to physical identification documents but are designed specifically for online use. According to the draft measure, Chinese citizens with valid legal identity documents can voluntarily apply for these credentials through the platform.

Legal experts note that while the system could streamline online authentication, it also raises privacy concerns. “A unified network identity could simplify authentication processes, but the centralization of identity data requires robust security measures,” said Shen Kui, a law professor at Peking University, in a public statement about the proposal.

The system includes several notable security features. Internet platforms using the verification results from the Public Service Platform will not need to collect users’ plaintext real-name information or contact details, potentially reducing the risk of data breaches. However, the centralized nature of the system means that any compromise of the platform itself could have widespread consequences.

Foreign nationals face certain restrictions under the new system. While they cannot apply using foreign passports, those holding Chinese permanent residence cards may be eligible to participate. The proposal also includes special provisions for minors, who can apply with guardian supervision.

Parallel to this identity initiative, China continues to expand its Digital Yuan program, which has seen significant developments since its initial trials. The People’s Bank of China (PBOC) has partnered with various technology providers to develop secure digital wallets for the Central Bank Digital Currency (CBDC).

The Digital Yuan differs from cryptocurrencies like Bitcoin in that it is centrally controlled and regulated by the PBOC. This CBDC is designed to replace some physical cash in circulation while providing authorities with greater oversight of financial transactions.

Both initiatives reflect China’s broader strategy to modernize its digital infrastructure while maintaining regulatory control over online activities and financial transactions.

Sources: Initial Network ID Proposal Coverage, Digital Yuan Hardware Development

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November 7, 2024 – by Cass Kennedy