Three days before the opening of the Winter Olympics at the National Stadium in Beijing, China has deployed a major operation to ensure the success of the launch of the e-CNY or digital yuan. TOothers to implement its mobile application and physical cards to pay with e-CNY, China will enable electronic wallets, such as smart watches. The goal is to make it easier for athletes and coaches to access digital currency to make contactless payments and without the need to open a bank account. From these digital wallets, the Central Bank of China (PboC) will allow you to pay with e-CNY with just a swipe. However, the exemption to the creation of a bank account will only apply during the Olympic Games.
Digital Yuan at the China Games
Bank of China has reported that the Olympic village will be equipped with self-service machines, where foreign athletes will be able to exchange their bills and coins for digital yuan. In addition, merchants and businesses will only accept Visa, yuan cash or e-CNY payments.
The digital yuan app is now available in Apple and Android stores in China
Although the launch of the digital yuan has not yet been made official, China’s sovereign digital currency is already visible and tangible to many. Giants like WeChat Pay and JD.com already include the digital yuan among their payment options, as do Alipay and Meituan. Important banks in the country, such as the Industrial and Commercial Bank of China (ICBC) and the Agricultural Bank of China (ABC), also allow their clients to operate with this digital currency. The PboC indicated in its whitepaper, published in July 2021, that e-CNY already had more than 1.32 million pilot scenarios for its use and implementation. Public services and transportation, among others. It should be remembered that the official launch of the digital yuan, according to the plans of the PboC, should be announced together with the Winter Olympics, which take place from February 4 to 20.
More than 260 million users
Thus, while the countries of the rest of the world discuss the possible issuance of a digital currency, the e-CNY accumulates more than 260 million active users. China’s e-CNY spending amounts to more than 87.5 billion yuan, about 13.75 billion U.S. dollars, according to reported Zou Lan, head of financial markets at the PboC, at a press conference in mid-January. Although the figures are significant, they are still far from competing with the volume transacted by payment applications such as Alipay and WeChat Pay. Both move about 90% of mobile payments in China, according to data from extra.
The mobile app for the digital yuan was launched in beta by the People’s Bank of China (PboC) in early January. Although the digital wallet was enabled only for selected citizens of 10 cities in China, it quickly became the second most downloaded financial application in the country, two days after its launch in the Xiaomi app store, according to reported the SCMP.
A cashless society
China has been pushing its digital currency since 2020. Over the past two years, the Central Bank has carried out numerous pilot tests for e-CNY. Like the realization of lotteries, where he gave away millions of digital yuan in some of the most important cities in the country. Or the implementation of digital currency payments at Shanghai subway stations, ATM withdrawals and payments at more than 1.5 million merchants. All the actions sought to integrate the e-CNY into the daily life of its more than 1,400 million citizens.
The key points of China’s digital yuan, the money of “controllable anonymity”
With its sovereign digital currency, China aspires to modernize its financial system to become a completely cashless society. But it also aims to subtract dominance from decentralized cryptocurrencies, such as Bitcoin and Ethereum, which are banned across the country. The e-CNY will also help China increase its presence within global markets.
boycott and Omicron
China’s commercial banks are already experimenting with the digital yuan
China’s intention was to introduce the digital yuan in a big way during the Winter Games, with the idea that it would be available to a global audience. However, the diplomatic boycott of some countries, such as the United States, and the new sanitary measures implemented by the Omicron variant of Covid, will prevent the massive entry of foreigners into the country. Reducing the use of the digital yuan to Chinese citizens and a small group of athletes and coaches. Notably, US senators and some Western regulators have asked their athletes not to use China’s digital currency, citing privacy and data security concerns.
lunar new year
However, despite the limited entry of foreigners and diplomatic tensions, the digital yuan appears poised for a successful launch. Of course, not in the terms that the PboC initially thought. The Chinese Lunar New Year, which begins today, February 1, is accompanied by a huge shopping festival that will last for two weeks. During this period, according to some estimates, Chinese citizens will spend about 860 billion yuan ($130 billion) on purchases and monetary gifts. With the official launch of the e-CNY in the coming days and with more than 260 million current users, it is foreseeable that an important part of said purchases will be carried out through this new digital currency.
The US asks to ban the use of the digital yuan to the athletes in the Games of China
BSN, the internet of blockchains
In addition to the notable advances with e-CNY, China’s commitment to technology goes beyond digital payments through a CBDC. The country, whose rejection of cryptocurrencies is adamant, is harnessing like no other the technology that brings cryptocurrencies to life. NFTs included.
China opens to the world BSN, its blockchain network to lead the global economy
China is developing a network of blockchain-based services, known as the Blockchain Services Network or BSN, which aspires to be the Internet of blockchains globally. ConsenSys and the consulting firm Ernst & Young (EY) are some of the partners in this network.
Through this infrastructure, China supports the development of e-CNY, in addition to other important innovations. Recently, He Yifan, Executive Director of Technical Support at BSN, reported on the launch of the digital collectibles minting platform Distributed Digital Certificates (DDC), built in the BSN. It is a digital platform with which the Chinese government will allow companies in the country to mint digital collectibles on blockchain or NFT not linked to cryptocurrencies. The DDC will help generate more than 10 million NFTs, which will cost around 0.05 yuan to mint, the SCMP said.
China leads fintech
With all these developments, it is clear that China is beating the United States and Europe in the race for the implementation of new financial technologies. The United States Federal Reserve (FED) is still in the process of evaluating and analyzing the advantages and risks of issuing a digital currency for the dollar. In Europe, the ECB gave the green light to the research phase of a CBDC for the euro, which could take until 2026 to become a reality.
The Bahamas was the first country to formalize the launch of a CBDC. It is followed by the islands of Antigua and Barbuda, Grenada, Saint Kitts, located in the Caribbean, which also have their own digital currency issued by the Eastern Caribbean Central Bank (ECCB). Nigeria also has a CBDC.
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