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E-CNY to be accepted at this month’s games, as over 80 countries work towards a CBDC

Financial Post | Ethan Lou | Jan 27, 2022

Beijing 2022 winter olympics - E-CNY to be accepted at this month’s games, as over 80 countries work towards a CBDCWhen the Beijing Winter Olympics begin next week, many in the cryptocurrency world will be watching.

That’s because China’s new digital yuan, the first central bank digital currency in a major economy, is expected to see wider use during the games.

The People’s Bank of China has been ramping up testing on the currency. A digital wallet has already appeared on app stores. The currency is still, of course, in a trial phase, but the Olympics — during which the digital yuan is expected to be made available to foreign athletes — are a chance to expand its reach.

See:  Rep. Emmer introduced legislation to prohibit the Federal Reserve from issuing a CBDC for use by individuals

It’s a test, but not just for China. Canada is creating a digital currency, even if it says it might not issue it. The U.S. is studying the idea, even if the Federal Reserve Chair Jerome Powell seems to be lukewarm. Governments all over the world are considering their own digital currencies. They will all be watching China’s implementation and execution of it.

And there is a lot to watch. Observers have already pointed out that such a digital currency would give China broad new powers when it comes to surveillance and controlling its population. A U.S. lawmaker has urged athletes not to use it. We may not get a lot of meaningful information in just two weeks, but the Olympics will mark the start of new attention paid to China. Governments around the world may shift their attitudes on the central bank digital currencies based on how the digital yuan is used and whether it succeeds.

See:  China’s CBDC Now Has 261 Million Users with $14 Billion in completed Transactions

Around the world, the idea of central bank digital currencies is being studied, and only that. Smaller economies have launched digital currencies, but largely in symbolic or half-hearted ways. Much of the discourse is still focused on theory. How will such a digital currency actually function on a large scale in a major economy? China’s execution of its digital yuan represents the first practical example.

For China, a lot is obviously riding on this Olympic trial, with the eyes of the world watching. But how China’s citizens use the digital yuan long-term will have bigger implications for central banks around the world.

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financial news | Jeremy Chan | Feb 1, 2022

Winter Olympics spotlight Beijing’s digital yuan: Will China’s CBDC plans push others to move faster?

Central bank digital currencies will get some international limelight over the next couple of weeks as China plans to test its digital yuan at the Beijing Winter Olympics.

The e-CNY has been in a public pilot for nearly two years, available to residents in 10 cities including Shanghai, Shenzhen and Xi’an. Nearly $14bn of transactions have been made using the digital currency, according to a People’s Bank of China official.

The digital yuan is a retail CBDC meant for domestic use. It requires a Chinese bank account. However, international visitors will be allowed to use the currency during the two-and-a-half-week sporting event.

See:  PBOC White Paper: e-CNY’s Path to Cross-Border Payments

According to Washington-based think tank, the Atlantic Council, 87 countries making up 90% of global GDP are exploring CBDCs. Of these, nine have launched a digital coin, while 14 are in a pilot phase.

The Bank of International Settlements — the ‘bank for central banks’ — said 13 out of its 17 Innovation Hub projects that are active or will be launched this year are related to CBDCs and improvements in the payments system. The bank’s London hub, which opened last year, will look at developing a platform to store, transfer and make payments using retail CBDCs for consumer and business use.

“[Central banks] are not all that neutral,” said Cédric Wahl, co-founder of Secretarium, a blockchain lab for banks and winner of a CBDC competition hosted by the Monetary Authority of Singapore.

He told Financial News that discussion papers like the Fed’s serve as recommendation roadmaps.

“[The U.S. is] letting themselves be guided because they don't have a mission statement. In essence, they need legislation to go forward.”

China’s role in pushing CBDCs

See:  Alt-M Analysis: Where the U.S. Feds CBDC Proposal Goes Wrong

The caution on pace is deliberate, but a full rollout of China’s CBDC could likely accelerate timetables.

“The People's Republic of China is moving much faster than anybody else,” said Wahl. He noted that Beijing’s CBDC is one of the major factors pushing the US to create a digital dollar.

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