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The integration of Digital Yuan payments through the Olympic Games has drawn a number of criticisms from world leaders.
Mu Changchun, Director-General of the People’s Bank of China’s Digital Currency Research Institute has given an insight into the dollar equivalent of the Digital Yuan (e-CNY) being transacted daily at the ongoing Beijing Olympics Games. As reported by Reuters, the e-CNY, is being used to make 2 million yuan ($315,761) or more of payments a day, securing the positive trend in the advanced trials preceding the official nationwide launch of the Central Bank Digital Currency (CBDC).
Digital Yuan at Olympics
It has been a few years of active development and trials that the Chinese government has put into the Digital Yuan creation to get it to the point it is at today. While the Bahamas beat the country as the first to launch a functional CBDC through the Bahamas Sand Dollar, China comes off as the largest economy in the world to take a CBDC to advanced trial stages.
The PBOC made the Digital Yuan accessible to foreign athletes and visitors who use the currency as a mode of payment for goods and services through smartphone apps, physical payment cards, or wristbands.
“I have rough idea that (there are) several, or a couple of million RMB (yuan) of payments every day, but I don’t have exact numbers yet,” Mu Changchun said during a webinar arranged by the Atlantic Council.
The PBOC installed a number of Automated Teller Machines (ATMs) through a state-owned financial institution, the Bank of China, and with this, any foreign athlete could deposit their fiat currency and convert it to either the fiat Yuan or the Digital Yuan equivalent. According to Changchun, there is no data to showcase the number of transactions made by local athletes and foreign ones, however, he pointed at a very clear trend.
“It seems all the foreign users are using hardware wallets,” Mu said, referring to the e-CNY payment cards, which look like credit cards without the normal chip and magnetic strip. “The software wallets are mainly used by the domestic users.”
Does the PBOC Have Sinister Agenda with the e-CNY?
The integration of Digital Yuan payments through the Olympic Games has drawn a number of criticisms from world leaders. With many suspicious of China’s potential to breach cybersecurity and data protection of athletes using the e-CNY, leaders from the United States and the UK have been requesting intervention for quite some time.
In a letter sent to President Joe Biden back in January, US Republican Senator and Vice Chairman of the Senate Select Committee on Intelligence Marco Rubio asked to know the steps being taken by the administration to protect American athletes from “surveillance and manipulation”, labeling the digital yuan a “tremendous security threat to individual users.”
Perhaps it is paranoia at play on the part of US leaders, China may still have to redefine its data protection policies for the rollout of the e-CNY to be hitch-free across the board when it is finally being launched nationwide. This will notably be more robust than the promise made by the PBOC Governor Yi Gang that the bank collects information on a “minimum and necessary” basis in e-CNY applications, and strictly controls the storage and usage of personal information.