- Three U.S. senators are pressing the 2022 U.S. Olympians not to use digital e-yuan during the Beijing Winter Olympics.
- China is currently piloting the e-yuan as a government-approved CBDC
- Senators claim using the e-yuan will be a cybersecurity and national security threat
Blockchain is praised for its ability to maintain data integrity and security while providing a heightened level of transaction transparency. China has reiterated its 2017 stance on cryptocurrencies, recently ousting crypto mining and financial interactions. In short, banning crypto gives leeway to implement e-yuan digital payments in the country. Three U.S. senators are cautioning 2022 Olympic participants not to interact with the digital e-yuan during the 2022 Beijing Olympics.
The Senate Gets Involved With The Olympics
The digital equivalent of the Chinese currency, e-yuan, is a cause of concern for the U.S. Senators Cynthia Lummis (R-WY), Marsha Blackburn (R-TN), and Roger Wicker (R-MS) who sent an open letter to the U.S. Olympic and Paralympic Committee asking them to “forbid” receiving and using the e-yuan during the 2022 Beijing Winter Olympics.
In their letter, senators argue the digitally released e-yuan is being freely distributed in China by the People’s Bank of China. The e-yuan has been tested in China since 2014, with citizens receiving “red envelopes,” amounting to a total of $40 million. Additionally, the senators emphasize the e-yuan may be “used to surveil Chinese citizens” and foreign citizens. As such, senators are “citing espionage and data-security concerns” as user’s funds can be tracked.
CBDCs have been piloted in China since 2014 in places such as Beijing, Chengdu, or Shenzhen, defining where and when wallets can spend the funds. Similarly, senators argue the Chinese government will have the ability to track users, despite opening digital wallets without having “a local bank account” during the 2022 trials.
On The Flipside
- Chinese society is already fully immersed in the digital culture as most transactions are through payment platforms.
- Blockchain technology is still implemented within China despite their banning most of the cryptocurrency culture.
- Central banks have expressed their interest in digital currencies, but they need to pass the test of protecting user’s anonymity.
E-Yuan and Their Place In Chinese Society
AliPay or WeChat partly monopolizes the payment system in China, and according to reports, the government is still tracking their activity. Furthermore, embedding CBDC’s such as the e-yuan into the fabric of Chinese society gives the Chinese government extra governing power. Fan Yifei, governor of People’s Bank of China, expressed he is “quite worried” about potential global risks of digital payments.
Robert Greene argues that the e-yuan as a government-backed digital currency could be used to “navigate international transactions” and facilitate financial interactions with US-sanctioned entities. Reuters reports, the U.S. Senate banned the import of products from the Xinjiang region. Punishing Beijing is not a direct correlation to the deployment of the digital e-yuan; however, such power plays an influence in both country’s actions as we advance.
Other countries are dabbling with the idea of digital currencies. For example, an EU Central Bank report highlights over 80 central banks are considering adopting CBDC. Additionally, Japan is also starting its own CBDC test project, while Switzerland still claims digital currencies are not practical.
China has asserted multiple times that the e-yuan is still in a trial period and is currently used for “domestic retail payments,” according to their whitepaper.
In response to the U.S. Senators, Zhao Lijian, the Chinese Foreign Ministry spokesperson, claimed the U.S. is politicizing sport. Furthermore, he stated senators need to understand what digital currencies are before making such bold statements.