China's digital yuan has the capability of tracking people's spending habits, where they send their money and potentially where they live. When you look at the future of digital currency, it may be headed towards the CCP's goals. There will be absolutely no freedom with spending habits being traced. This would be good for the government that is interested in stopping money laundering but it'll also introduce a new level of technological privacy invasion. When the "Fed Coin" becomes a reality, I don't think most people would trust it very much.
All CBDCs have the same intention. To track people's usage and where money goes. The fiat banking system tried to do this but because there are many points of failures and many lines away from the center, there is easy manipulation and fraud. No country knows exactly how much of their supply is in existence or in use or even how much counterfeit there is. This digital system, centralized, ensures total oversight.