The Winter Olympic Games in Beijing are currently taking place and athletic talent is not the only competition being showcased.
Alongside the Olympians who have gathered from around the world to compete in physical displays of strength, China is flexing its own proverbial muscle in the global economy.
In a move that laps the United States and Europe, China has released the digital yuan to the public, making it the first economic superpower to issue a central bank digital currency (CBDC).
According to Reuters, China’s new digital currency, the e-CNY, is being used to make 2 million yuan ($315,761) or more of payments a day in its latest pilot at the Beijing Winter Olympics.
While the Bahamas already has a fully functioning digital currency, China’s sheer size means that its attempt to develop a central bank digital currency (CBDC) is being closely watched.
Its latest trial is notable for the number of people attending the Games, and the fact that athletes, coaches and media from around the world can all use it via 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, director-general of the PBOC’s Digital Currency Research Institute, said during a webinar arranged by the Atlantic Council.
Few months back, Global mobile-first payments infrastructure company Celo, in partnership with global media company Forbes hosted a virtual forum under the theme: “The Future of Central Bank Digital Currencies (CBDCs) and Cryptocurrency,” where experts from central banks and the world’s leading financial institutions discussed progress, challenges and what the future looks like around this evolving technology.
Speaking at the virtual event, Jim Cunha, executive vice president, Secure Payments & FinTech, Federal Reserve Bank of Boston said “As countries adopt the idea of CBDCs, we should build flexible and sustainable structures that work with different countries according to the problems they are trying to solve. We must also think of “Privacy” when we talk about CBDCs”.
Seeing the increasing need for digital currencies and security of its users, Celo also announced the launch of a new solution called Provo, a value-add sandbox for public and official sector experimentation that allows Central Banks to explore and experiment with central bank digital currencies and other digital assets.
In a statement titled ‘Winning the Digital Currency Race’, Briana Marbury, Executive Director, Interledger Foundation, said that creatively rolling out the digital yuan at the Games by providing athletes ski gloves and smartwatches with built-in digital payment functions, China is hoping to gain an advantage over their measured competitors who have been sluggish to move forward with their own CBDCs. Conveniently (for them), the digital yuan also happens to be one of only three forms of payment accepted in the Olympic Village.
“Strong-arming aside, this is an impressive display of a large government body showing its willingness to embrace innovation.
“However, the initial uptake of the digital yuan has been slow due to stringent Covid restrictions imposed on Olympic visitors and privacy concerns highlighted by government representatives from the West.
Marbury further said that as the major superpowers in the world contemplate the best way to introduce a CBDC into their economy while simultaneously maintaining stability, the Chinese government has bet that the fastest across the finish line wins the race.
She added that in the US specifically, with the exception of a few outliers, many government officials have been more focused on regulating the emerging payments space in a time when collaboration and understanding are needed.
“There is a fine line between reflection and research, and paralysis.
“If we don’t transition from analyzing to actually implementing – even if it’s a small pilot – the US is guaranteed to lose the race by forfeit”, Marbury warned.
Interledger Foundation aims to build access to financial pathways around the world. Marbury brings 15 years of non-profit experience and leadership to the role, as well as a passion for promoting financial inclusion for all.
As Executive Director, Briana’s goal is to educate and bring awareness around the Interledger Protocol.
She is dedicated to expanding the public’s understanding of the technology’s immense potential to improve lives. Briana was named one of the top 100 leaders in 2022 by Fintech Magazine.
The Interledger Foundation works to support financial innovation that will create a more equitable and creative society through an open payments network where anyone can easily earn, share, buy, sell and trade with anyone else in the world.
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