China Debuts Digital Yuan at Winter Olympics Amid Warnings From US Senator
The eCNY, or digital yuan, can be used to make purchases within the Olympic Village
Beijing 2022 Winter Olympics | Source: Shutterstock
key takeaways
- China has debuted its digital yuan to foreign visitors and athletes during the 2022 Winter Olympic Games in Beijing
- Senator Pat Toomey is asking policymakers to keep a watchful eye on the performance of the eCNY, labeling it as a means to “facilitate illicit money flows,” and its capacity to enhance “China’s surveillance capabilities”
China has debuted an international trial for its central bank digital currency (CBDC) at the 2022 Beijing Winter Olympics amid concerns from US Senator Pat Toomey (R-Pa.) over the potential for the digital yuan to circumvent US sanctions.
Digital yuan trials, which have been ongoing domestically since 2019, were introduced to athletes and foreign visitors on Thursday as a means to pay for goods inside the Olympic Village alongside Visa payments and cash.
China is hoping to boost the digital yuan’s presence throughout the country with the Winter Olympics as its platform to showcase to the rest of the world.
The trial follows China’s recently announced list of 164 national blockchain entities to join domestic retail CBDC tests that will examine the feasibility of its product across a wide range of industries. Crypto is banned in the communist state, but China is a strong proponent of blockchain technology, albeit in a much more private, centralized and censored form.
In a letter penned by the senator to Treasury Secretary Janet Yellen and Secretary of State Antony Blinken on Wednesday, Toomey asked policymakers to “closely examine Beijing’s CBDC rollout” during the games and to provide his office with a briefing by Mar. 7.
“Analysts have raised the eCNY’s potential to subvert US sanctions, facilitate illicit money flows, enhance China’s surveillance capabilities and provide Beijing with “first mover” advantages, such as setting standards in cross-border digital payments,” Toomey wrote.
Toomey is requesting knowledge on the CBDC rollout, including its distribution, user experience and the underlying source code to determine “ulterior motives,” censorship features or security flaws, according to the letter.
The senator is also seeking answers regarding the extent to which non-Chinese government officials, including the US, transacted in the digital yuan, among other requests. He said China’s crackdown on crypto presents an opportunity for the US to be the “forerunner” of crypto innovation, “grounded in individual freedom, and other American and democratic principles.”
Toomey, who is a member of the US Senate Committee on Banking, Housing and Urban Affairs, has long advocated for crypto regulation with a “do no harm” mindset and has previously asked the Securities and Exchange Commission to avoid hindering innovation as the US continues to figure out how to best approach fintech innovation.
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