More than $300,000 of China’s new CBDC is being spent at the Olympics every day

• Head of China’s central bank claims that over $300,000 of China’s new digital yuan is being spent at the Olympics on a daily basis.
• Since the launch of the CBDC experiment, the country has reportedly clocked in over $14 billion in transactions.
• Concerns remain around whether China’s digital currency is another way for the country to expand its economic surveillance.

Testing its central bank digital currency (CBDC) at the Beijing Winter Olympics 2022, a Chinese official has disclosed that over $315,000 worth of the digital currency is changing hands each day as payments. Designated as the e-CNY or digital yuan from April 2020, the Olympics widened the chance for the new currency to be used by foreign athletes, coaches, and media personnel covering the event.

Speaking at an Atlantic Council conference webinar on Tuesday, Mu Changchun, director general of the Digital Currency Research Institute at the People’s Bank of China (PBOC), also disclosed another significant trend — Chinese nationals were using software wallets while foreign attendees preferred hardware wallets.

‘Hardware wallets’ are payment cards that look like credit cards, but have no EMV chip or magnetic strip. Specialised ATMs have been set up at game venues, to accept foreign currency banknotes, and convert them to digital yuan (CBDC) or ordinary yuan currency notes.

China’s digital yuan is being used in 11 cities

Earlier in January, China had released smartphone apps to receive and spend the new digital currency from mobile phones, which serves as a software wallet. By the end of 2021, the country reported 261 million users of the CBDC, eight million merchants who accept it, and transactions worth almost $14 billion.

The CBDC trials began small, but now the CBDC pilot stage has been expanded to be used in 11 designated cities, including Beijing itself.

According to the Atlantic Council’s CBDC tracker, 91 countries are at various stages of adopting a CBDC. However, its large economy and the reported usage numbers seen in China’s CBDC pilot, put it ahead of even the nine countries that have officially begun using a CBDC in full-fledged form.

Yes to blockchain but no to cryptocurrencies

China’s CBDC is said to be based on blockchain, and the country has even stated an official interest in blockchain-based digital innovation. Yet, the country banned decentralised cryptocurrency mining and transactions in September 2021, despite being home to the most Bitcoin miners at the time, according to CCAF.

Yi Gang, the governor of China’s central bank has previously spoken about balancing the need for privacy with crime prevention. He has also said the CBDC will focus on domestic retail payments for now, as “cross-border digital payments involve more complicated issues, such as anti-money laundering.”

Privacy concerns remain

Privacy, data protection and cybersecurity have been concerns voiced overseas, though.

The digital yuan, because it is a centralised currency at the end of the day, poses a “tremendous security threat to individual users,” Marco Rubio, a US lawmaker, told Reuters. He added that athletes don’t want to be tracked, they should be protected from “surveillance and manipulation.”

“The Chinese authorities are intent on using the digital yuan to expand their economic surveillance activities,” claimed DavidMcCarville, director of US law firm Fennemore.

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