States & Localities Surveillance & Privacy

The Programmable State: The e-CNY and China’s Quest for Smarter Surveillance

Yaya J. Fanusie, Emily Jin
Thursday, April 17, 2025, 3:00 PM
China’s digital yuan could set a global precedent for programmable money—and for state-controlled financial surveillance.
A sign on the Hangzhou Metro advertising acceptance of the Digital Renminbi, a central bank digital currency issued by the People's Bank of China.
A sign on the Hangzhou Metro advertising the Digital Renminbi, the central bank digital currency of the People's Bank of China. (commons.wikimedia.org/wiki/File:Digital_RMB_sign_Hangzhou.jpg, CC BY-SA 4.0, creativecommons.org/licenses/by-sa/4.0/deed.en)
Meet The Authors

Published by The Lawfare Institute
in Cooperation With
Brookings

Subscribe to Lawfare

The e-CNY, China’s central bank digital currency, has significant implications for both Chinese domestic surveillance and U.S. national security. In this new research report, we explore how the e-CNY’s architecture—specifically its two-tiered system and programmability—enables smart contracts and enhanced tracking of financial transactions. The Chinese government promotes e-CNY adoption through incentives and integration with essential services, aiming to create a more “intelligible” and controllable economy.

We argue that the e-CNY carries substantial risks, including increased state surveillance, compromised privacy, and economic retaliation against foreign firms. While the e-CNY is currently focused domestically, it could influence global digital financial norms and reduce China’s reliance on U.S.-dominated financial infrastructure. U.S. policymakers should respond by prohibiting U.S. entities from using e-CNY, influencing standards for foreign CBDCs, and encouraging domestic digital finance innovation.

You can read the paper here or below:

Topics:
States & Localities Surveillance & Privacy
Back to Top
Yaya J. Fanusie

Yaya J. Fanusie

@SignCurve
Read More
Yaya J. Fanusie is the director of policy for anti-money laundering & cyber risk at the Crypto Council for Innovation. He also is a visiting fellow at the Psaros Center for Financial Markets & Policy at Georgetown University and an adjunct senior fellow in the Energy, Economics, and Security Program at the Center for a New American Security, where he focuses on the U.S. national security implications of global financial technology innovation.
Emily Jin

Emily Jin

@ew_jin
Read More
Emily Jin is a senior China analyst at Datenna Inc. Her research focuses on U.S.-China competition over regional influence and global order, and policy at the intersection of American economic resilience and national security.
}

More Articles 

Subscribe to Lawfare