The digital yuan's "controllable anonymity" balances privacy and anti-money laundering (AML) oversight. Small transactions remain anonymous, requiring only a phone number, while larger ones demand stricter KYC verification, enabling traceability. The People's Bank of China (PBoC) employs big data analysis to monitor suspicious activities, ensuring compliance with AML, counter-terrorism financing, and tax evasion regulations. This tiered system reportedly enhances monitoring precision, with the PBoC claiming the digital yuan offers the highest privacy among payment tools while maintaining traceability for illicit transactions. Real-world cases, like a 2024 Zhejiang court sentencing for laundering 200,000 yuan, demonstrate effective detection. The centralized design ensures robust oversight, though privacy concerns persist due to potential government surveillance.