is that they are worried that digital yuan will give the Chinese gov, the power over them, because they believe the Chinese gov can just freeze their funds from anywhere even if they are not kept in Chinese banks or foreign banks even. I don't know if the Chinese gov can do that. Even if Chinese gov can do that, I believe the Chinese gov won't misuse this power because it will affect the adoption of digital yuan negatively. But like it or not, the fear is there and China need to address it if China want the world to adopt digital yuan.

IMHO, I think China can address this issue by launching two digital currencies, one centralized digital currency for Chinese domestic market, and another decentralized digital currency for global market.